[Music] all right. Derek asks, Good morning, Money Guy team. My wife and I are 30 and not planning on having kids. Is saving 25% really necessary with two incomes and no kids, or would 20% be sufficient? So, not only is this one of those personal and personal finance questions, but I'm curious to hear you talk about why 25% and what should he consider as he thinks about this. I think it's interesting to think that the kids is the difference between 20 and 25%. Derek, here's the reality of the situation: you're 30 right now, and I don't, you know, I think about my 30-year-old self. Things will change, but what? Because I've even given the perspective that when I was 25, 26 years old, I started saving at a more aggressive pace because I had this vision that I was going to retire at 50. Um, and now look, I'm now past 50.

and I am so far from retirement um that I'm hoping I get to do this till the day that I'm taking off this planet. I really do cuz I love what I get to do for a living, but it shows it's just it's showing that perspectives change. But what I'm very thankful for is that I was saving at a higher point even in my mid-20s and 30s because it gave me margin, and that's the part, the flexibility that you get by being disciplined and living off of less than you make. And the more you can do that, the you know, early and often, you're going to get more options, more choices to live life on your terms and buy your time. That is the most valuable thing that we have on the planet, both for building wealth but also enjoying and living your best life. So I want you to think about it. You're trying to go from 20 to 25% and the kids, yes, that can play into the dynamics and the mathematics of it.

but the reality is you want to own your life that much sooner. We have a great deliverable call. If you go to moneyguide.com for you, Nate, do we have the ability to pull that one up? Oh, it's amazing. And what I want you to do is this. This is what's great. So if you think about, you said that you and your wife are 30 years old. If you start saving right now 25% of your gross income, you would be on pace by the time that you get to age 65 to be able to replace 120%, 119% of your pre-retirement income. So you kind of get to do a pay raise when you retire. Or what you're able to do is you're actually able to retire a little bit earlier. Now you can see the difference in saving for a 30-year-old, saving 25% versus saving 20%. You go from 119% replacement ratio to a 95% replacement ratio. Again, that is still fantastic. That's wonderful. What I

like about saving early and often is exactly what you said. It gives you margin so that you have more flexibility to do the things that you want to do sooner. Because maybe life happens, maybe you do decide you end up having kids, or maybe jobs change, or maybe you have to move where you live in the country. And there are going to be unforeseen circumstances that cause you to have to decrease your savings rate in the future. Well, if you saved aggressively early on, you are insulated from that having a huge impact on your financial life. Or if those things don't happen, and all you do is just continue to save 25% starting right now all the way till you get into your 40s and 50s, there's a really good chance that you will be able to design the life that you want to live much earlier than someone who chose a much lower savings rate. So, I think there's a balance between enjoying today and living for today and getting value out of the things you're doing today, but

also aggressively saving for the future so that you can have a Great Big Beautiful Tomorrow. There's also this spectrum issue is that somebody who's 30 years old, you're closer to the beginning of your savings rate that you're probably your assets even if you're a prolific saver is just hasn't had enough time to build upon itself to reach that bowling point or that you know escape velocity. But then I I I I don't want to Discount that I do love having this discussions to so that you get to live your best Balanced Life is because I do want people in their 20s and 30s to be very disciplined but also not to be misers. I want you to enjoy every decade of your life but I love that we give you the guidance you can focus on that balance so that you're also not the 40 to 45y old that is saving it at aggressive savings rates to the detriment of your future self but you just have to know where are you on the

on the Spectrum. Have you reached the bowling point? Have you, you know, got yourself in a good place? I'm purposely trying to say it right. Am I still saying it wrong? No, no, you're nailing it. It's so good. Gosh, so good.

Is Investing 25% Really Necessary with Two Incomes and No Plans for Kids?

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