Your savings rate is the share of your income you set aside. Save €12,000 from a net income of €45,000 and your savings rate is 27%.
That figure determines your timeline to financial independence more than your return does, and it works twice over: you contribute more and you need less.
The well-known table linking savings rate to years comes from the American FIRE movement. For the Netherlands that table gives an answer up to twenty-two years too pessimistic.
Gross or net?
First the problem every discussion about savings rates runs into: people use different denominators.
Take someone on €70,000 gross, €45,000 net, saving €12,000:
| Calculation | Savings rate |
|---|---|
| On gross income | 17.1% |
| On net income | 26.7% |
The same behaviour, nine and a half percentage points of difference in the reported figure.
Calculate on net. That's the amount you can genuinely divide between spending and saving, and it makes your rate comparable to your spending. Calculating on gross sounds more modest and is less useful, because you have no choice over the part going to tax.
When you encounter an impressive savings rate online, ask which denominator was used.
What counts as saving?
Three items are debated, and the answer changes your figure considerably.
Mortgage repayment: yes. That's wealth you're building, even though it sits in bricks. It lowers your debt and raises your equity. Include it, but keep it separately visible, because it's less liquid than investments.
Your pension contribution: defensible either way. It's wealth accumulation, but you can't access it until your pension date. Include it and your rate is higher while your available wealth is lower than it appears. My preference: leave it out of your rate and treat it as the future income stream it is, as explained in the article on the three pension pillars.
Saving for a holiday or a car: no. That's deferred consumption, not wealth accumulation. The money disappears eventually anyway.
The simplest rule: what you set aside and don't intend to spend counts.
The table, American versus Dutch
Now the point of this article. Starting point: someone aged thirty, from zero, net income €50,000, 4% real return.
| Savings rate | Spending | Contribution | US target | US years | Dutch target | NL years | Stops at |
|---|---|---|---|---|---|---|---|
| 10% | €45,000 | €5,000 | €1,125,000 | 58.7 | €389,564 | 36.5 | 66.5 |
| 15% | €42,500 | €7,500 | €1,062,500 | 48.4 | €452,069 | 31.8 | 61.8 |
| 20% | €40,000 | €10,000 | €1,000,000 | 41.0 | €483,293 | 27.5 | 57.5 |
| 25% | €37,500 | €12,500 | €937,500 | 35.3 | €487,069 | 24.0 | 54.0 |
| 30% | €35,000 | €15,000 | €875,000 | 30.7 | €474,569 | 21.0 | 51.0 |
| 40% | €30,000 | €20,000 | €750,000 | 23.4 | €424,086 | 15.8 | 45.8 |
| 50% | €25,000 | €25,000 | €625,000 | 17.7 | €385,909 | 12.5 | 42.5 |
| 60% | €20,000 | €30,000 | €500,000 | 13.0 | €329,959 | 9.5 | 39.5 |
| 70% | €15,000 | €35,000 | €375,000 | 9.1 | €260,509 | 6.8 | 36.8 |
The difference in years:
| Savings rate | American | Dutch | Faster |
|---|---|---|---|
| 10% | 58.7 years | 36.5 years | 22.2 years |
| 20% | 41.0 years | 27.5 years | 13.5 years |
| 30% | 30.7 years | 21.0 years | 9.7 years |
| 40% | 23.4 years | 15.8 years | 7.6 years |
| 50% | 17.7 years | 12.5 years | 5.2 years |
Why the Netherlands is so much faster
Because the American table assumes twenty-five times your annual spending, which presumes your wealth must carry your spending forever.
Here, state and occupational pensions arrive from state pension age. Your wealth therefore only has to bridge the years to that date, plus the gap remaining afterwards. That's a considerably smaller amount. How that calculation works is in the article on your FIRE number.
The effect is largest at low savings rates, which follows: anyone saving slowly stops later, so the bridge is shorter and the pension advantage proportionally larger. At a 10% rate it saves twenty-two years; at 50%, five.
Why the required amount peaks around 25%
A result that runs against intuition. Look again at the Dutch target column:
From 10% to 25% the required amount rises, from €389,564 to €487,069. After that it falls again, to €260,509 at a 70% rate.
That's because two forces work against each other.
Anyone saving slowly stops late. At a 10% rate you stop at sixty-six. Your bridge is then one year, so almost all your wealth serves to cover the gap after your state pension date. That's a small amount.
Anyone saving fast stops early. At a 70% rate you stop at thirty-six. Your bridge is then thirty-one years, which is expensive, but your spending is so low that the total stays limited.
Around a 25% rate those two effects balance and the required amount peaks. Practically that means: sitting around that level, raising your rate delivers extra, because you lower your target and raise your pace.
Why a higher rate works twice over
This is the mechanism behind the whole table.
Going from a 20% to a 30% rate on a net income of €50,000 means:
- Your spending falls from €40,000 to €35,000, so your target drops
- Your contribution rises from €10,000 to €15,000, so your pace increases
Every euro shifted from spending to saving works on both sides. That's why your savings rate weighs more than your return, as set out in the article on compound interest: ten percentage points of savings rate beats two percentage points of extra return.
And it's a lever you can pull. Returns aren't.
What a realistic rate looks like
Honest context, because those percentages aren't equally achievable.
The average Dutch household savings rate sits somewhere in the low double digits, varying strongly with income and life stage. Anyone with children and a mortgage typically sits low. Anyone living alone on a good income can reach high.
Twenty to thirty percent is achievable for most dual earners without exceptional circumstances. Above fifty percent usually requires a high income, low housing costs, or both.
Important: the table isn't a competition. The difference between 20% and 25% is three and a half years, and that's worth more than chasing a percentage you can't sustain.
How to raise it
Two routes, and one is more reliable than the other.
Lowering your spending works immediately and twice over. Every €1,000 less a year raises your contribution by €1,000 and lowers your target by roughly €25,000.
Raising your income works only if the difference goes into your contributions. A pay rise landing entirely in your lifestyle raises your spending and therefore your target, moving you further from your goal on net.
That second is the trap most high earners fall into. It's also why savings rate is a better measure than savings amount: someone saving €2,000 a month from €10,000 of income is further from independence than someone saving €1,000 from €2,500.
How Gylder fits in
Calculating your savings rate requires two figures most people don't have to hand: what comes in and what goes out.
Gylder categorises your transactions automatically, with a model running entirely on its own servers, and excludes transfers between your own accounts. That makes your spending figure a measurement rather than an estimate, and that's precisely where a savings rate breaks down: people forget the irregular items.
You also see your wealth updated daily across all your accounts. The combination of those two is your savings rate, and then you also see whether it holds month to month or only in the year you calculated it.
What this doesn't tell you
The table assumes starting from zero. With existing wealth, every timeline shortens.
The pension amounts are examples. €18,000 and €12,000 are placeholders. Your own are with the SVB and on mijnpensioenoverzicht.nl.
The real return is an assumption. At 3% rather than 4% every timeline is considerably longer.
A constant savings rate doesn't exist. Children, a renovation, a job change. The table uses a fixed percentage across forty years and nobody sustains that.
Frequently asked questions
What is a savings rate? The share of your income you set aside, as a percentage. Saving €12,000 from €45,000 net is 26.7%.
Do I calculate on gross or net income? On net. That's the amount you can genuinely divide between spending and saving. Calculating on gross gives a lower figure for the same behaviour.
Does my mortgage repayment count? Yes, that's wealth accumulation. Keep it separately visible though, because it's less liquid than investments.
Does my pension contribution count? That's debated. It's wealth accumulation you can't access until your pension date. My preference is to leave it out and treat it as future income.
What's a good savings rate? Twenty to thirty percent is achievable for many households and produces a timeline of twenty-one to twenty-eight years from zero. Better a rate you sustain than a percentage you chase.