Hi John, This is a fantastic question. Here is how I handle it when calculating my savings rate.

Say my take-home pay is $10,000 per month and I’m currently saving $5,000. That would put my savings rate at 50%. If I have a 401k which I contribute $500 and my employer matches with another $500 for a total of $1,000 per month.

I add that $1,000 back into my “take-home pay” and count it towards savings.

So, no my “take-home pay is $11,000 of which I save $6,000. This brings my savings rate up from 50% to 54.5%. Not an exact science, but the best and simplest approximation for me.

I’m thinking about a post that talks in more depth about this subject and how we should include pension plan contributions into our savings rate and FIRE plans.

Thanks for the fantastic question John! Did that answer your question?

Economic policy wonk by day. Personal finance writer by night. I write about investing, debt, and all things related to money. Editor of Making of a Millionaire

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