According to Lord Emperor MMM:
The savings rate is simply the percentage of your take home pay that you’re not spending.
http://www.mrmoneymustache.com/2015/01/26/calculating-net-worth/
This seems to be the most common method I see on the forums, but it's always a little ambiguous when someone says their savings rate is X%, because people do use various methods.
Wouldn't that be skewed a bit with a person putting money on their 401k?
I feel the one "true" number would be really % of gross income because depending on the individual there many way to lower or increases one "take home pay"
- 401k contributions
- health insurance premiums
- dental insurance premiums
- vision insurance premiums
- HSA and FSA contributions if one have access to them
- Other expenses : like my wife gets to purchase the costs of her train passes and parking pre-taxes
Not everyone has all or the same deductions, so going by "gross" would put everyone on equal footing for "comparison" purpose or to grasp a true idea of how much someone is savings.
Anyway just my personal $0.02 and was curious. Thank you for the responses...
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