The Rule Of 30: Book Review

The Rule Of 30: Book Review And Giveaway

I’ve read a lot of personal finance books over the years. Most say some version of the same thing. Live below your means. Pay yourself first. Avoid debt like the plague. Invest your savings for the future. Rarely do I see a novel concept that gets me excited to share it far and wide. But that’s exactly what author Fred Vettese did with his latest book, The Rule of 30.

Mr. Vettese is a retirement expert, author of the best selling Retirement Income For Life, and a former chief actuary of Morneau Shepell. His retirement planning books are must-reads for Canadians in or approaching retirement. 

The Rule of 30 is aimed at a different generation of Canadians: those aged 30 to 45. The book follows a Wealthy Barber-esque fable of a young 30-something couple (Brett and Megan) and their neighbour Jim, who happens to be a retired actuary. Similar to The Wealthy Barber tale, Brett and Megan have a series of weekend discussions with Jim to figure out how to save for retirement.

What exactly is this magical rule of 30?

Easy: Save an amount equal to 30% of gross income, minus the amount you are paying towards a mortgage or rent, minus extraordinary short-term expenses like daycare costs.

The rule aims to strike a better balance between competing financial priorities. It also makes it easier to decide how much to set aside each year, and is more realistic and achievable than saving a flat percentage of pay, especially during the expensive childcare years.

This is all about consumption smoothing – not depriving oneself of a standard of living during the years of juggling competing financial goals. It backloads the high savings rate to later years when childcare expenses are long gone and the mortgage or rent payments make up a much smaller percentage of your gross income.

I love it! This brilliant yet simple rule is exactly what young Canadians need who are financially tapped out and feeling like they’re falling behind. They can’t do it all, so why strive to save 10-15% of your income for retirement while you live paycheque to paycheque?

Mr. Vettese says to follow the rule of 30 until you’re within 10 years of retirement. At that point, take stock of your retirement-readiness and adjust your savings percentage accordingly.

For the record, most people still cling to the arbitrary 10% savings rule.

What I like about the rule of 30 is that it acknowledges the fact that life is hard for young families. Saving too much at an early age can have negative consequences for your enjoyment of life. The rule of 30 gives young savers a break, but offers clear guidelines about how much to save when short-term extraordinary expenses ease up and income increases.

Again, the rule of 30 involves saving 30% a year for retirement, minus mortgage payments or rent, and minus extraordinary short-term, necessary expenses like daycare. 

It’s essentially a way to save until age 55, at which point a more precise calculation can be made for your required savings rate with help from a retirement calculator (or a fee-only financial planner).

Let’s see the rule of 30 in action.

Fake clients of mine named Ronnie and Lisa have a combined gross income of $166,666. The rule of 30 says they should save $50,000 (30%), less mortgage payments and childcare costs.

Their mortgage costs $2,300 per month, or $27,600 per year. They also have daycare expenses of $1,200 per month, or $14,400 per year.

This leaves Ronnie and Lisa with $8,000 per year to save for retirement. Astute readers will note that is just 4.8% of their gross income.

But the childcare costs won’t last forever. In five years those costs will be reduced to zero. At that time, with 2% annual salary increases, Ronnie and Lisa now earn a combined $184,000 per year. The rule of 30 says they should save $55,200 (30%), less mortgage payments and other extraordinary costs.

Their mortgage costs are still $2,300 per month, or $27,600 per year. They don’t have any other extraordinary costs.

This leaves Ronnie and Lisa with $27,600 per year to save for retirement. That’s now 15% of their gross income. Fantastic!

Ronnie and Lisa follow this path, increasing their savings rate as their income rises until eventually their mortgage is fully paid off. Let’s say they’re now earning a combined $225,000 gross income. The rule of 30 says they should save a whopping $67,500 for retirement (30%). And they can do this because their mortgage is paid off.

The beauty of the rule of 30 is all along the way Ronnie and Lisa can maintain a fairly smooth spending rate. There’s no period in which they are suffering financially. They give themselves a break on saving for retirement during their expensive childcare years, when the mortgage also makes up a larger percentage of their gross income and take-home pay. Then they ramp up their savings as their income increases and extraordinary costs disappear. 

Dangers of The Rule of 30

Mr. Vettese acknowledges the dangers of this variable approach to saving for retirement. What else can be classified as an extraordinary short-term expense? A car loan? A home renovation loan? The author says there will always be expenses that fall into a grey area, and whether to include them as an offset to retirement savings is entirely up to you. But there’s no incentive for you to ‘game’ the system since you’re only cheating yourself at the end of the day.

Another danger is the risk of job loss or health issues that prevent you from earning income in your later years. If you’ve backloaded savings too much then there’s a good chance you won’t be prepared for retirement.

Mr. Vettese suggests paying off your mortgage five years before retirement (staying within the rule of 30, that would mean increasing the mortgage payments and reducing your savings rate). He also suggests discounting your projected income in your final working years by about 30% to hedge against one spouse losing their job.

Other Retirement Savings Enhancements

Besides saving 30% of gross pay, minus mortgage or rent, minus extraordinary short-term expenses, Mr. Vettese offers plenty of other insights in The Rule of 30

He suggests investing in stocks and bonds instead of real estate. While buying condos or other real estate properties and renting them out has been a popular alternative to investing, Mr. Vettese says that as long as you have contribution room in an RRSP or TFSA, the use of tax-assisted investment vehicles is a better bet.

He also says to use a target-date-fund approach to set your asset mix, rather than using a static 60/40 balanced portfolio throughout your entire investing lifetime. That means starting with a high equity weighting (up to 100%) in your portfolio when you’re young, and then gradually increasing the bond weighting to an “ultimate-mix” of 50/50 just before retirement. Mr. Vettese says this approach has been more effective than a 60/40 asset mix over 30-year periods.

How Much To Save For Retirement?

I laughed when I read the opening chapter about how much you should save. Mr. Vettese was scouring books and the internet to find a source promoting a specific savings rate. None could be found. Then he wrote this:

My last find was an online article by Global News, which reported that “you may have heard you should be saving 10-15 percent of your pre-tax income”. This was tantalizing, since I wasn’t sure I had heard that, though it did sound vaguely familiar. Alas, this little nugget turned out to be little more than hearsay. The article didn’t cite the source of this 10-15 percent range or attempt to confirm that it is indeed correct. It smacked of urban legend.

The reason I laughed is because this article sounded familiar to me and indeed I was interviewed for it by Global’s Erica Alini. Hey, I made it into the book – sort of!

Mr. Vettese attempts to offer an answer to the question of how much to save for retirement with the rule of 30. He acknowledges that in reality, no one percentage can be certain to carry most savers across the finish line safely without causing undue hardship along the way. 

He says if he absolutely had to provide a one-size-fits-all flat percentage of pay, he would make it 12% with the caveat that you might have to change that percentage as you get closer to retirement. Expressed differently, he would suggest saving 5% of income in your 30s, 15% in your 40s, and 25% in your 50s. This alternative represents a rough approximation of the rule of 30 (and lines up neatly with my Ronnie and Lisa example above).

Time For a Giveaway!

The Rule of 30 is a brand new book (released today!) by retirement expert and former chief actuary Fred Vettese. It offers an absolutely brilliant solution to the burning question of how much to save for retirement throughout your working years.

In addition to the rule of 30 and other retirement savings insights, Mr. Vettese shares his insightful wisdom about why the future will be different with a look at inflation, wage increases, interest rates, expected returns for bonds, and the wildly unpredictable stock market.

In short, this is book is an absolute game-changer for young Canadians and offers a fresh perspective on saving and investing for retirement. If young Canadians read only one book about personal finance, make sure it’s The Rule of 30.

I was fortunate enough to receive an early edition of The Rule of 30, plus an extra copy to giveaway to a lucky reader. You can enter to win that copy by leaving a comment below sharing your current savings rate (if you’re in the accumulating years) or past savings rate (if you’re already retired). Or, feel free to leave any comment in general about the rule of 30.

This contest will be open until Friday October 22nd at 8 p.m. EST. I’ll announce the winner in the next edition of Weekend Reading.

Good luck! 

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  1. Zasid on October 19, 2021 at 4:51 am

    Its good but what about people who are single earner in family woth pretty much staganent wage.I am able to save around 30% but my partner just started working on low income.Entering my email for the contest goodluck everyone!

    • Harry on October 19, 2021 at 9:25 am

      After one year of mortgage payment our statement showed our payments totalled $12k. All but $100 went to interest payments. From then on it was an all out war on debt reduction. No more coffee purchases or lunches out.
      Our savings rate was about 25% for 10 years until our mortgage was paid off and boosted it to 35-40% of our gross.
      Retired by 50 and believe that getting rid of or not getting into high interest debt should definitely be a a priority for young couples. Must say that following Boomer and Echo helped improve our financial literacy in the last dozen years.

    • Robb Engen on October 19, 2021 at 12:03 pm

      Hi Zasid, the book addresses all kinds of issues like single earners, low or no wage growth, renters vs. owners, etc. The bottom line is it’s going to be tougher for those who can’t quite get the math to work. This includes young people living in cities where housing costs take up 30% of income.

  2. John Thong on October 19, 2021 at 4:52 am

    Saving is always good, and should be done consistently. Managing your savings is vital towards your nest egg. Invest consistently and wisely, but do not be overly aggressive or greedy as it may lead to breaking your own bank. Balance your investment portfolio carefully and periodically review and rebalance it will lead you towards a comfortable retirement income.

    • Jerri on October 19, 2021 at 8:30 am

      Currently saving 15% about 90% of the time.

    • Stephen on October 19, 2021 at 8:47 pm

      Rule of 30 has a good rationale behind it, however it is the money saved very young that has the biggest impact – thanks to the compounding magic that provides exponential growth after a few tens of years. For that reason, the sacrifice made early on payback handsomely.
      Been saving 30% a good portion of the last 20 years, and it now shows.

  3. Stacy Norman on October 19, 2021 at 5:08 am

    This is a good concise review of the book. Personally, I believe success in personal finance is more attributable to a particularly good foundation in knowledge and not so much a magical formula.

  4. Nancy St John on October 19, 2021 at 5:22 am

    Unbelievably we have reached the de -accumulation phase. I would love to give this book to my three grown accumulating daughters!

  5. Barb Hashimoto on October 19, 2021 at 5:38 am

    Should be taught in high schools.

  6. Skylar on October 19, 2021 at 5:43 am

    We have a ‘set it and forget it’ approach to investing, and are in our late 30’s with two school age kids. Loved the Wealthy Barber book when I was a keen young teen, and would be interested in reading this too!

  7. Chris on October 19, 2021 at 5:44 am

    Interesting idea, thanks for sharing! I wanted to see how my own experience compared with this, so I took a (rough) look back at some previous years. We definitely exceeded the rule of 30, but we’ve always been aiming for early retirement (or at least early financial independence).
    For example, when my daughter was born, my wife stayed home for a couple of years. I earned $72K, we had a mortgage of ~$10K, and no child care costs. That would mean we should have saved $11,600 according to the rule of 30. We did a bit better, saving more like $19,000. We were working in the US at the time, though, and had good tax-deferred options available to us, which made it easier.

    This seems like a good metric for folks looking for a more conservative retirement timeline, though.

    • Robb Engen on October 19, 2021 at 12:08 pm

      Hi Chris, you definitely need a more aggressive savings rate (or spend less on mortgage and other expenses) if you plan to retire early. This rule of 30 path will get you there by age 60-65.

  8. Charleen Clark on October 19, 2021 at 6:11 am

    I like this idea. I’ll be calculating my rule of 30 today. Right now, my only real savings is my teacher’s pension, but once my son is out of school, savings will increase.

  9. A T on October 19, 2021 at 6:17 am

    It was ~40% before my children were born. Now it’s <10%!

  10. Mary on October 19, 2021 at 6:23 am

    We have been talking to our sons (age 31 and 36) about their retirement savings. They feel (and rightfully so), that their lives are very different than ours. One is a Gig worker (he is in the Film industry) and the other is getting reestablished after suddenly getting laid off after 12 years in a professional job with a telco. This book may be very helpful to them but I would need to review it on their behalf first.

  11. Judy Gimby on October 19, 2021 at 6:29 am

    Great news that Mr Vettese has written a book for younger age groups! Having followed this informative author’s advice en route to my own recent retirement I most definitely want a copy to share with my thirty something adult children! I am sure it will provide some very useful tools!

  12. Jill on October 19, 2021 at 6:33 am

    I am now past the accumulation years, but when I was saving for retirement it was at least 10% and I always maxed out my RRSP contributions. The book sounds perfect for my 3 adult nieces..

  13. Karen & Parkins on October 19, 2021 at 6:40 am

    This sounds like a great book to read for those in the accumulating years. This book sounds ideal to pass around to my 4 children who are all in that situation and only one of them has a workplace pension while the others have none. I think savings, in any form, is always a good thing.

  14. Pepe on October 19, 2021 at 6:40 am

    I like it because beyond shouting to the air a fixed number, it brings to the table the need for thinking first on your life circumstances and being pragmatic about it.

    It’s “funny” how many times discussions around this ignore people whose financial life started on their 30s. Commonly, people who immigrate to Canada starting from practically zero or even Canadiens whose life gets up side down due to family or relationship issues, are left with the uncomfortable bag of feeling late to the game at the very moment they are doing the best they can to live a better life and move on.

    • Robb Engen on October 19, 2021 at 12:11 pm

      Hi Pepe, you’ve nailed it with this comment. The Rule of 30 is a much more sensible and realistic way to approach saving. The book was a breath of fresh air in the personal finance space, which can often be too judgemental and preachy.

      • David on October 19, 2021 at 1:35 pm

        I migrated here in my Thirties and started then from zero.

        Blundered into a real estate investment which nearly killed me, but committed me to large forced “savings” over many years. Culminated in being able to retire in my Sixties once OAS and Canada Pension kicked in.

        Life is unpredictable and messy. Rules of 30 may be good on paper, but are really for highly disciplined people with unusually stable lives and lifestyles. Overemphasis on saving for retirement leads to a life not lived fully in the present.

        • Robb Engen on October 19, 2021 at 1:51 pm

          Hi David, thanks for your comment. I think the opposite is true – the rule of 30 works for people with unpredictable income and allows you to be flexible with your savings so you can enjoy your life (hence the consumption smoothing concept). Conversely, sticking to a rigid 10-15% per year savings rate does not allow the same flexibility throughout your lifetime.

      • LHM on October 19, 2021 at 9:49 pm

        I would love to share this book with my adult kids. We have pretty much followed this without even knowing it! There were times in our life where we really focused on eliminating debt but only if we knew it was short term and wouldn’t sabatoge our saving.

  15. David Scott on October 19, 2021 at 6:46 am

    I have read Mr Vettese’s other books and found them somewhat informative, yet focused a little too much for my liking on annuities. I am very interesting in reading this book and seeing if it would be a good read for my adult children. Based on your review, Fred’s new formula for young people sounds very intriguing and may provide a useful target that could be employed during the accumulation phase.

    We started saving and investing in our late 20’s at a very low rate as we had both a mortgage and kids in daycare. Our lives basically mirrored your example couple and what Fred’s book is suggesting and it has allowed us to retire in our mid-fifties. Our own experience suggests to me that this formula of Fred’s provides a tangible method for young adults to follow.

  16. Scott on October 19, 2021 at 6:49 am

    Count me in the contest. The Wealthy Barber was my first financial lesson back when it was first published some 20 years ago. While I have passed on some of those lessons to my millennial daughter, I sometimes question its relevancy to today’s times. Perhaps the Rule of 30 will be a guide for her securing her financial future.

  17. Denis St-Onge on October 19, 2021 at 6:51 am

    I am also in my deaccumulation years. I enjoy reading finance books even if they do not necessarily apply to me. I have many nieces and nephews as well as many grand nieces and nephews that would benefit from reading this book. One question that remains to many of them is…”How can we plan for the future when we have a $1000000 dollar mortgage”??? I simply answer by stating, if you can afford a mortgage of this size, you are lucky, now you need to figure the rest out and a book like this may help. Everything is relative…and we are living in different times!

  18. S Patel on October 19, 2021 at 6:52 am

    I am 56 and so is my spouse and have combined savings of about $1.6m. My lesson is no matter which rule you follow, does not matter as much. Just save, enjoy your life as you go along, take vacations etc. But you must save and save early even if it is a small amount.

  19. Geoff Carter on October 19, 2021 at 6:53 am

    My spouse and I raised 4 children, but thrived by saving 15% of gross income. This addition of mortgage costs and child care makes complete sense.

  20. Jim on October 19, 2021 at 6:55 am

    We’re at about a 20% savings rate, which feels pretty comfortable considering we’re paying to put one kid through daycare.

  21. Simon Grenier letourneau on October 19, 2021 at 6:59 am

    About 35 % in the past 3 years ! Before that almost zéro. Started fire journey at 31

    • C Wicks on October 19, 2021 at 8:12 am

      Have read all of Fred’s books and newspaper articles and think his approach to personal financial management is very practical and really quite brilliant. Have to some extent, lived his principles myself, and found them to be very beneficial to myself and my family, having put two children through university and just about prepared myself and my wife for retirement. However, could very much use a copy of his new book as a guide for our two millennial children, to set them on the right path as they set about their life’s Financial Journey! Thank you!

    • Diane on October 20, 2021 at 8:32 am

      I would love this book. In my 30’s with three kids and living on a single income. This would be great to see a different perspective on saving as I am currently putting away 20% and feel like I need a paradigm shift to make life more enjoyable.

  22. DALE on October 19, 2021 at 7:07 am

    Was fortunate to travel to 3rd world countries earlier in my life and since then have always used the mentality for the most part of asking myself “want vs need” when purchasing anything & in this way have probably saved more than could ever imagine-regrettably now just starting the investing side of things later in life which I wish I had done much earlier….better late than never….right….??? 😉

  23. Glen on October 19, 2021 at 7:09 am

    Why are the calculations based on gross income? The only thing that people see in their accounts are after tax dollars, which can be 25-40% less.

    • Robb Engen on October 19, 2021 at 12:15 pm

      Hi Glen, while I agree that you only see your take-home pay after taxes, it’s quite common to use gross income for these types of rules. Banks use gross income when you want to qualify for a mortgage.

  24. John Hartog on October 19, 2021 at 7:10 am

    How will these poor people be able to go to Florida and Mexico and drive two Audis. Guess bank of Mom and Dad.

  25. Louisa Cochrane on October 19, 2021 at 7:15 am

    any good solid grounded information is great! We work everyday in exchange for money and the lack of knowledge is still so astounding to me. Literacy, easy good stories are a powerful motivator. Look forward to reading it and passing it along to my young adult daughters.

  26. Jen Moore on October 19, 2021 at 7:18 am

    I am looking forward to reading the book. I am not one that generally believes in “formulas” per se to achieve financial security, however, I do think that having some structure, such as what Mr. Vettese is proposing, particularly for younger people, who, having multiple financial obligations, could help them to visualize and structure their savings, even if they aren’t able to exactly meet the target of 30% of gross income. Most people start to worry about retirement savings very late in their lives and it becomes a major source of stress for them. I think this idea could be very constructive and more palatable to a wider range of young adults, than a blanket 10-15% of income rule. It also leaves room for the possibility of inheritance later in life, which is never included as part of a financial plan, but is nice when it happens.

  27. Jane Ralling on October 19, 2021 at 7:18 am

    I am now retired but my daughter is just at the beginning of her investment “career” and I think that this book might be just the ticket to give her sound (and objective) advice on how to go about investing.

    Love your posts Robb!

  28. Sandra Butchko on October 19, 2021 at 7:19 am

    Thank you for doing the book review. I always did saved the 10% – and now nearing retirement. It sounds like a great read and looking forward to reading it.

  29. Steve Bridge on October 19, 2021 at 7:20 am

    Great review Robb! I hadn’t heard of the book yet and am intrigued by the rule.

    I think the biggest thing people will need to figure out is that grey area you mentioned, I.e., what qualifies as a short term expense?

    From the comments others have left, it looks like a lot of sons, daughters, nieces, nephews, and grandkids will be getting this book as a Christmas present!

    Thanks again for the great review!


    • Robb Engen on October 19, 2021 at 12:18 pm

      Hi Steve, you’re right that a lot of people will abuse the grey area to cover non-essential short-term expenses. That’s fine, but you’re really only cheating yourself. That said, we had a car payment for four years and didn’t contribute to our TFSAs during that time. That was a trade-off we made with ourselves. Once we paid off the car we doubled up our TFSA contributions until we caught up. So it’s possible to play around with the grey areas if you’re honest with yourself and commit to catching up.

  30. Ben on October 19, 2021 at 7:21 am

    Interesting idea, I’m excited to do the math! We just put our second kid into daycare. Wondering if mandatory 5% contributions to a DB pension are considered?

    • Robb Engen on October 19, 2021 at 12:24 pm

      Hi Ben, the pension contributions are definitely considered savings. This is addressed in the book as well.

  31. Kat on October 19, 2021 at 7:28 am

    My husband and I are in our early 40’s we are saving 48% of our combined incomes. I would love to read this book. We are trying to retire early. I would love to read this book.

    • Gary on October 21, 2021 at 7:58 am

      I have one of Fred’s books which was given to me by my daughter. This one would be a great gift to her and my son as I’m well into my de-accumulation years. As always, thanks for a terrific post Robb.

  32. Bob McCabe on October 19, 2021 at 7:38 am

    I retired a couple of years ago and roughly saving 30%. As my kids are full time students with good part time jobs, I encourage them to save 60% of their net pay as we cover most of their cost of living. This book would be a great leaning tool for them.
    Thanks Robb for the great article.

  33. Sandra B on October 19, 2021 at 7:41 am

    David Chilton was a guest speaker at a teachers’ conference I attended at the beginning of my career in the late 80’s. Still have my signed copy of The Wealthy Barber. Thanks to his concepts, we retired debt-free. Our children, however, are a different story! As long as they can make their numerous minimum monthly payments, they spend. This sounds like the perfect Christmas gift. A gift that “will keep on giving” for years.

  34. Anne on October 19, 2021 at 7:41 am

    I am really excited to read this latest book from Fred. I am a avid fan of his work and I like the way he thinks! It sounds like it will be sound advise for my two adult children who are in the targeted group for the next 30 years.

  35. Joel on October 19, 2021 at 7:44 am

    Interesting idea. In the age range of 30-40, my percent is close to 7% with childcare, principle home mortgage not included. In 5 years, my percent should be closer to 12% with childcare costs removed (as long as I don’t buy a vehicle during that time)

  36. James on October 19, 2021 at 7:44 am

    Vetesse writes good books. I like the idea of living in your means. We did not stick to a set rate but it was around 20%.

  37. Tristan on October 19, 2021 at 7:56 am

    Hi Rob,
    It would be an interesting read. I am sure I would enjoy it.
    My income at the moment is quite limited, since I focus on completing by bachelor. Had the chance to make good money during summers in the past years, so I invested the extra in index ETFs.
    The rule of 30 could be a good strategy through my carreer!

  38. Jake on October 19, 2021 at 8:07 am

    Think I’m saving too much and missing out on some of the fun things in life like travel. That could be due to COVID… would be an interesting read to help me out! Thanks for putting it on my radar.

  39. Bill J on October 19, 2021 at 8:14 am

    Very interesting. I am currently at 15% (age 37). My wife and I just had our first baby so we are working through mat/pat leave and then daycare costs so this is timely! I like the idea of adjusting the percentage during these years so will definitely look into it. Would love to share with my three siblings (33-39) and mom who is nearing retirement (and just widowed two months ago).

  40. Jane Hladky on October 19, 2021 at 8:20 am

    I enjoyed Fred’s last book and any book geared toward younger people is a great idea. I wish more companies use would provide financial literacy to youth. I believe we at times saved 50% but likely averaged 30. Our goal was to pay off our mortgage as fast as possible and did so by age 41. I am not a fan of waiting to age 55 to do so. I get child care costs, we raised 4 kids but these days you see the 25-30 year olds driving fancy cars and living in expensive houses. Whatever happened to a used car and starter home and then moving up as you can afford it?

  41. Shelley Sweazey on October 19, 2021 at 8:27 am

    I am past the “rule of 30” for myself as retirement is on the horizon! However, I have 4 children between 21-28 who are just starting out and looking at buying a house in this crazy Ontario housing market! I would love to be able to share this with them to set them on the right financial track!

  42. Jan on October 19, 2021 at 8:33 am

    My husband and I are both 62 and have been frugal and saved money over the years, with no mortgage since we were about 42. Since we have always paid our credit cards off at the end of the month we have had no other debt than our mortgage at the time. We never used a formula for paying our mortgage down, just the thought of put money on the principal each year and get rid of it. We have a 28 year old son who is planning to move out on his own soon. Buying a condo is a dream for him but he will be renting . He has just started to dabble in the market and we have taught him and his younger sister good foundation skills like getting a good credit rating, pay your credit card off at the end of each month, and they are doing well so far with saving their money. I would love to have a copy of this book to read for myself and then pass along to my children to read as well.

  43. WS on October 19, 2021 at 8:41 am

    We have been saving more than 40% of our gross income and we are in early accumulation stage.

  44. Kathryn on October 19, 2021 at 8:44 am

    Saved about 30% average, with hills and valleys through the daycare and mortgage years. Part of this high savings rate possible because of a fairly low-key lifestyle that’s not for everyone! Camping, using the library, mostly cooking at home, etc.
    I enjoy Fred’s books and will definitely read his latest, and gift it to my adult kids. They spend everything and save nothing, having just bought and renovated their first home, and started a family. I’m more stressed about their finances than they are!

  45. Peter G on October 19, 2021 at 8:47 am

    I’m of an age where I saved by the 10% rule. This had it’s ups and downs. This is what I suggested to my 30 something children but in today’s financial environment it can be difficult.
    The Rule of 30 seems to have a flexibility in it as it takes into account ‘Life’. Perhaps a better solution for today’s younger generations.

  46. Mary A. on October 19, 2021 at 8:47 am

    From early age my parents guided me to save 10% of any money received including my allowance. By 14 my savings from a part time job had to include the 10% plus buying my own clothes. During my 20’s raised two toddlers on my own, worked several jobs and still got my degree. At 40 bought my first home, with the attitude buy smaller than you can afford. When at 50 an accident hospitalized me for a few years, my savings enabled me to keep the house and my family together. Now my grandchildren are in their late 20’s to mid 30’s and are always asking me for planning advice. At 75 I have learned that “history repeats itself”. Vettee’s book would give my grandchildren (and myself) further insight for financial planning in a world much different then what I grew up in.

  47. Raymond Hoger on October 19, 2021 at 8:51 am

    I think I pretty much followed the rule of 30, and I am now enjoying the rewards, 5 years into my retirement. A great book to give to my children

  48. Kate Heibein on October 19, 2021 at 8:56 am

    Enjoyed Fred’s last book and look forward to reading this one. I’m old so we went by the old 10 % rule but certainly like the idea of the “Rule of 30”. Have kids in their 20’s who could certainly benefit from heeding this advice.
    Enjoy the variety of topics on this blog.

  49. Gary on October 19, 2021 at 9:08 am

    We are retired now, but our savings rate varied widely. We tried to pay our mortgage off quickly and then the cost of children started to kick in. We always maxed out on company sponsored savings programs which included a matching contribution.

  50. Alan Swanson on October 19, 2021 at 9:14 am

    Having saved a substantial amount I have found two things are key. First is to make a bit of a game out of saving inspiring you to achieve more with an understanding that unless you have a windfall of infinite wealth you will never have “enough” and as I face retirement today it is still nerve racking to jump into retirement despite having achieved our financial goals. Secondly, without earning well above average income levels into the top 1% of earners, amassing liquid cash/stock wealth above $2m 30 or 40 years from now is virtually impossible. The point of this is that you need to aligned standard of living with income potential and retirement lifestyle goals therein matching a +\-30 year retirement spend to determine “how much money you need to retire”.

  51. Kim H. on October 19, 2021 at 9:34 am

    I am retired now and looking back we saved about 7% per year through our working years. The most important part of hindsight is doing a budget every 2nd year and of course saving into the tax saving investments first. We are in great shape now.

  52. TraceyH on October 19, 2021 at 9:36 am

    We’re retired but have kids in their 30s so this book would be great to loan to both of them! We saved 10% from about age 30 onwards and that increased gradually to about 30-35% in the last decade because the mortgage was paid off and the kids were launched. I love Fred’s books so I’m looking forward to reading this one.

  53. Leanne B on October 19, 2021 at 9:39 am

    Super interesting perspective! We’re currently at about 16% since we still have daycare costs for a few more years.

  54. rick on October 19, 2021 at 10:00 am

    sounds like another good path to save for retirement. I think at the end of the day the most important rule is “TO START”! now, not next week, next month, next year, but TODAY!

  55. Lee on October 19, 2021 at 10:19 am

    I am about to enter my 30s and am currently saving about 47% of my take home pay. This includes payments to a pension plan, RRSP, TFSA and into a HISA in hopes of being able to put a down payment in the next 5 years (I live on the west coast so we’ll see). I by no means make an extravagant amount of money, but have had to learn about financial responsibility from a young age as a child of immigrants. Always seeking to grow my financial literacy and look to your articles for guidance and perspective.

  56. James Lo on October 19, 2021 at 10:23 am

    Never heard of the idea of consumption smoothing but I am very much on board. I was just got engaged and we just purchased our first home together, so coupled with an impending wedding and future children shortly, the rule of 30 is going to come in quite handy as we continue our careers and path towards retirement!

  57. Krishna Peesapati on October 19, 2021 at 10:34 am

    I am loving the comments here – so thanks to every one of you for sharing. I am definitely not meeting the rule of 30 suggested in the book. I am on the accelerated mortgage payment and current math indicate i will be out of it in the next 4 years with 10% of my gross going into savings. My mortgage is up for renewal next year and i guess i am taking the payments down. will be good to understand what other tips the book has 🙂

  58. Ali on October 19, 2021 at 11:17 am

    I save around 10% on top of whatever goes directly to my pension at work.

  59. PF Reader on October 19, 2021 at 11:26 am

    Great review, I’m in this late 30’s demographic so this really speaks to me and our situation right now. I just put this book on hold at the library 🙂 We save 10-15% but that is after our pensions are already taken off. We are lucky to both have DBPP’s and a fairly high HHI, so depsite the high costs of our mortgage and daycare, we have been able to keep our registered accounts maxxed out.

  60. Kim DC on October 19, 2021 at 11:36 am

    Interesting POV! We’re currently saving about half my salary for retirement. Like overall rate is about 25-30%. We slowly increase it over time as our situation changes.

  61. Ye on October 19, 2021 at 11:40 am

    I am currently single in my early 30s with no child. I am saving ~ 50% of my pay cheque each month – Trying to take advantage of the life stage that I am at and accumulate maximum amount of net worth.

  62. Alex on October 19, 2021 at 11:45 am

    I updated our tracking numbers just yesterday! Our average savings rate for the last three years is 47%. Might sound like a sacrifice but do all of the things enjoy!

  63. G Page on October 19, 2021 at 12:04 pm

    Great idea and thanks so much for sharing! For many years, my wife and I have tracked what we call our ‘non-needed’ or’retirement’ savings rate for each month. In the early years, we were saving about 10%-15% a month with pension plans and RRSPs. We knew this would increase as we got older. Now in our early and mid-fifties, we are saving about 20%-45% a month, with a few months on the high side due to a third paycheque received those months. I can certainly see this would be a game changer for those just starting and those needing to catch up. Would love to share this book with my son, who is in his early twenties. Thanks Rob!

  64. Pam on October 19, 2021 at 12:16 pm

    I have a savings rate of about 25% – but am aggressively paying off my mortgage. I would be interested in reading this book and have book marked it in my amazon wishlist. I read the wealthy barber when I was a young’un and it made me always look towards saving and compound interest but this seems like a good refresh!

  65. Mario R on October 19, 2021 at 2:22 pm

    The rule of 30% sound like a better approach than the one I read so long ago, being 10% of your earnings. In addition to meet my retirement target, I took a 12 years mortgage instead of a 25 year one. A little bit tight for making payments, but at the end made it easier than expected to get rid of this debt!

  66. Andy Gregory on October 19, 2021 at 2:26 pm

    On the advice of my dad from my first day at work just after my 17th birthday I saved a minimum 10%, that increased to 16% in my late 20’s and 30’s, dropped to 0% for a couple of years when I emigrated to Canada aged 40, then went to max allowed for the RRSP + TFSA and up to 10% in to non registered accounts depending on the kids university costs.

    I was able to retire at 51 and thats down to strong saving and investment discipline from an early age, I still have a multi decade outlook with how my portfolio is built and will continue to save extra income I earn now as I got bored during COVID, got licensed in a new role and started a new career a couple of months ago to keep busy and social.

  67. Alan Jeffs on October 19, 2021 at 3:28 pm

    Fred’s books have all been amazing, and it is great to read that he is targeting a younger demographic with his latest! Our three kids, who All fall within the 30 to 45 year old range, will all benefit from his wisdom end guidance.

  68. Lynn on October 19, 2021 at 3:45 pm

    As much as possible. Mortgage paid off, kids in school though. Final stretch.

  69. Jolene on October 19, 2021 at 3:54 pm

    It’s like Fred wrote this book for me to read, hopefully I win the contest, or else it’ll be on my library wish list! I am in my early thirties and just now focusing my time on becoming financially literate.

    I have been contributing to a defined benefit pension plan for a decade which is approximately 10% of my gross income, in addition to my a group RRSP at 8% with a 2% company match. In the past year thanks to podcasts and you Robb my newest financial goal is to make up for lost time in TFSA contributions. I would estimate my savings rate this year will be close to 30%!

  70. JG on October 19, 2021 at 4:19 pm

    Currently saving rate of +20%. Maximizing the tax savings from RRSPs & TFSAs accounts.

  71. Nash on October 19, 2021 at 4:42 pm

    I am at that magical age of of 35 and would love to get enlightened by reading the book

  72. Dave Harries on October 19, 2021 at 4:57 pm

    No. It’s not percentages that will lead to financial independence, it’s dollars and I have never understood why more people do not understand that.

    What nestegg do you need to support the life you would like to lead and the estate you would like to leave? That’s a tricky question to answer and requires several assumptions that will have to be updated as time goes by but at least the answer is in dollars and that’s what’s needed to start meaningful planning, planning that will require more assumptions that will also have to be kept up to date. It’s not rocket science. It’s just 30 or 40 numbers that produce your targeted nestegg.

    Just remember, no target, no bull’s eye…and the sooner you want to achieve your target, the bigger that targeted nestegg must be. It’s not easy, but it is simple!

  73. Vicki Wisniewski on October 19, 2021 at 5:24 pm

    Would love to read this book and then pass it on to my thirty something kids. My husband and I always concentrated on 10-15% savings while paying extra on our mortgage. As we got closer to retirement we upped our rate to 30-35%. Just wish TFSA’s had come into our timeline earlier, so it wouldn’t be so hard to take funds out of our RRSPs.

  74. Peter Moir on October 19, 2021 at 5:49 pm

    We are currently retired but I would estimate our savings rate in pre-retirement would have been around 10%. The book would be an excellent resource for our two daughters in their 30’s.

  75. Rob on October 19, 2021 at 5:54 pm

    Having an actual flexible framework and guideline for Canadians planning for retirement is great! I recently sought out rate and date benchmarks and other than Fidelity’s % of salary benchmarks, there isn’t much out there.
    I’ll see whether I win the book before adding it to my library queue or picking it up…
    We save for retirement at about 16% including employer match and approximately 10% without match. We’re at about $250,000 before tax, give or take, between RRSPs and TFSA, and four years to go on the mortgage.

  76. Brigid on October 19, 2021 at 5:58 pm

    Hi, my current savings rate is about 20% but I don’t have childcare costs and I’m in my 30s. I switched jobs which made saving much easier.

  77. Kevin on October 19, 2021 at 6:00 pm

    I liked hearing Fred on the Rational Reminder. I’m an actuary too.

    Haven’t explicitly kept track of our savings rate now because daycare costs lower it so much. But trying to save as much in possible so we can reach FI in about 5 years.

  78. Sameer on October 19, 2021 at 6:07 pm

    If Preet Banerjee recommends your book that means you need to read it.

  79. Bob on October 19, 2021 at 6:19 pm

    Yes 12% works very good, I advise the adult children to do a yearly plan and load that TFSA…when possible use the TFSA earnings to max out the annual RRSP contribution then put the tax refund back into the TFSA. Looking forward to sharing the book with them.

  80. Deb on October 19, 2021 at 6:44 pm

    We’re currently saving about 30% of our gross in an effort to max out our RRSP contribution room from years past. In our mid-40s, we definitely feel the drive to get it done ASAP as retirement will be here before we know if!

  81. Jen on October 19, 2021 at 6:55 pm

    I’m in my 30’s, single, no kids, and am fortunately still living at home. I pay a very small amount of rent to my parents + the internet bill, so I’m able to save about 60% right now. I know this won’t last forever, so I’m taking advantage of this time with them!

  82. John W on October 19, 2021 at 7:21 pm

    Currently saving between 10 and 15%. I know I should increase this especially as I am approaching the end of the accumulating years.

  83. Keith B on October 19, 2021 at 8:20 pm

    This theory provides flexibility and understanding for the competing money and time pressures of young parents in their 30s (children/child care, still building careers/finishing professional education phases, saving for or affording a mortgage, daily life costs and future savings).

    I am fortunate to be a working professional with a reasonably high earning capacity (~200k) but my wife is still finishing up her own professional training as a nurse practitioner and is currently “working” in an unpaid practicum, which means we have temporarily lost her regular earning potential as a registered nurse but maintained the obligation to pay for childcare for our two children plus pay her school fees. We have been able to generally maintain a savings rate of ~5% of household gross income during this time but spend a lot of time feeling like we are falling behind by not being able to contribute more. This 30% Rule is so freeing as it gives us the permission to do what we can now but also cut ourselves some slack for doing what we can give our circumstances, but also provides a clear path to really ramp things up as time and opportunity allows over time.

    Really appreciate you posting about this!!

  84. Parween on October 20, 2021 at 1:17 am

    I love this approach, especially as a young millennial at 27, I’ve taken the approach to save aggressively now knowing that my thirties will be child regarding a mortgage etc. But I know of other peers who weren’t able to or are in their thirties and stressed out, this is a great perspective to give HOPE. There’s still time!

  85. Stephanie on October 20, 2021 at 5:57 am

    I’m interested to read what the book says about investing in your late 20s. These have been the “golden years” of saving for my partner and I. Since finishing post-secondary in the first half of our 20s, the past five years we’ve been saving 30-40% of our total net income. With the amount of time these savings will have to grow I see these initial years as very important to our retirement strategy. Once we enter our thirties, when we plan to purchase a house and have kids, the rule of 30 seems like a good fit and I’ll feel more comfortable reducing our retirement savings knowing we have some of the hard work already in our late 20s.

  86. Mike on October 20, 2021 at 7:03 am

    A great concept that I hope my daughter will embrace

  87. Dave E. on October 20, 2021 at 7:49 am

    I am now retired with my RRSP fully funded. I saved about 10% of my paycheque while working.
    That was the only tax deferred solution at the time.
    When The TFSA rolled out, I started contributing to that. Now it is smart to use the TFSA if you don’t need to lower your taxable income when in a lower bracket.
    Save as much as you can.

  88. Reuben on October 20, 2021 at 8:49 am

    Currently saving about 13% of household income, looking to aggressively grow income and savings rate in the near future. Fred was great on the Rational Reminder podcast, it would be great to read his book.

  89. M. T. MacPhee on October 20, 2021 at 9:28 am

    I’m retired, but my son is just the right age to benefit greatly from this book. From your description, I would have benefited greatly by following its advice. I hope my son can.

  90. Mike Lee on October 20, 2021 at 10:54 am

    Love the blog and look forward to continued learning on my journey. I love the idea of always learning and I’m sure this book would be yet another great opportunity to learn about another strategy on my path to Financial Wellness. Currently investing 27% of gross income but would gladly welcome the new strategic information this book would provide. Thanks for the opportunity B&E!

  91. John Rosenberg on October 20, 2021 at 2:49 pm

    I like Fred’s other works as well. We started our boys on the wealthy barber seems like a nice follow up a couple of decades later. We are close to end game so are saving 10% but I have a DB pension that provides 60% of working income once retired.

  92. Rachel V. on October 20, 2021 at 3:21 pm

    I’m saving roughly 13% of my gross income. Thanks Robb for the opportunity!

  93. Josh on October 20, 2021 at 3:23 pm

    Currently at 9%. Thanks for the blog!

  94. Jess on October 20, 2021 at 4:48 pm

    Currently saving 4% of gross + 10% of net. Living in a high housing cost city and paying for child care. This book would be great for our family!

  95. Olivier on October 20, 2021 at 7:09 pm

    That sounds like a good read! I can see how the rule of 30 makes sense.

  96. Robbie on October 20, 2021 at 7:49 pm

    Hey Robb (et al), these giveaways really up the comments! Record comments since the last giveaway. Great idea and thanks for completing the summary of the book and bringing it to attention. It’s added to the to-read list. Currently @ 34% for Mortgage + Savings with 20% of that for Retirement Savings. Mid-30s and done daycare…probably…maybe…

    Anyways…now that this is written on the internet…can’t let that rate drop. Talk about accountability.

  97. Jessica on October 20, 2021 at 10:45 pm

    I’d love a copy of this book!
    My partner and I are just really starting to figure out how to save in our early 30s. Right now I’m only really saving 5% help!

  98. Christina drabik on October 20, 2021 at 11:44 pm

    I was actually freaking out after reading the global news article as i always thought you calculated the percentage based on after tax income and i was saving 15% then i find out i’m supposed to save a percentage of pre tax income. I actually think 12% is achievable so i’m happy to hear that.

  99. Igra on October 21, 2021 at 12:31 am

    We’re currently saving 20%. Would love to read the book.

  100. Lori on October 21, 2021 at 6:38 am

    Saving 17% in addition to pension plan contributions.

  101. Jackie on October 21, 2021 at 10:54 am

    It’s an interesting concept and it gives you some breathing room, which is a psychological benefit.
    I don’t understand why you’d discount rent though. If you’re a renter and planning to stay a renter, that won’t go away.
    I’ve enjoyed his other books and I like his methodical approach.

    • Robb Engen on October 21, 2021 at 2:50 pm

      Hi Jackie, the author addresses renters as well (and the rule is 30% of gross income minus mortgage or rent, minus extraordinary short-term expenses). So the same rule of 30 would apply. He also assumes homeowners ‘trade-up’ in their mid-forties so their savings rate dips again in those years.

      Rent tends to be cheaper than a mortgage payment, so renters would save more than homeowners under the rule of 30. They’ll need to save more, because the rent won’t disappear like a mortgage payment (hopefully) does at retirement age.

      As your wages rise, your rent payment as a percentage will make up less and less of your gross income – leaving you more room to save under the rule of 30.

      Believe me, I tried to poke as many holes as I could through this rule but the author addressed pretty much all of them in the book. Of course, if your goal is to retire much earlier than 60-65 then you’ll need to increase your savings rate. But this could also be accomplished by not having as high of rent payments or extraordinary expenses in your early years.

  102. Christina on October 21, 2021 at 2:18 pm

    My financial planner is actually arguing you can consider mortgage prepayments as part of your retirement savings i guess as you will be more financially secure if you have your mortgage paid off in retirement. Has anyone heard of this?

    • Robb Engen on October 21, 2021 at 2:54 pm

      Hi Christine, in this case (the rule of 30) your planner is correct. If you direct more of your extra cash flow to mortgage payments as part of your “rule of 30” the trade-off is that you won’t be able to save / invest as much during those years. But the upside is when the mortgage is paid off ahead of schedule you could start saving a full 30% towards your retirement accounts.

      As usual, a balanced approach is probably the best way to tackle this problem.

  103. Holly on October 21, 2021 at 2:26 pm

    We just paid off the mortgage so our new savings rate is yet to be determined but it will likely be in the 30% range.

  104. Rachel on October 22, 2021 at 8:39 am

    Vettese’s previous retirement book was a game changer for our retirement plan. It seems that this new book will help answer the very real retirement issues and questions Millennials may have. Can’t wait to read.

  105. Brant on October 22, 2021 at 7:45 pm

    I can’t wait to read this! I am 34 years old and my wife is 31. We have two little ones, two years old and 7 months. Life is a bit of a grind at the moment but we wouldn’t have it any other way. We are grateful to be at around 17% savings rate with my wife on maternity leave and we are considering her not going back to work until the kids are in school.

  106. Gin on October 23, 2021 at 5:39 pm

    I happened to also read Rob Carrick’s article in the Globe and Mail on this topic and took the opportunity to comment and include a link to yours 🙂 as I really liked the ‘rule of 30’ in action.
    Fred Vettese bring a wealth of experience, knowledge and data to this topic. I loved his retirement income book and I would love for my son to read this new book aimed at younger people.
    As a Boomer myself, I do tire of the anecdotal stories brought forward in comments blaming young people for the financial challenges they face today: latte’s, avocado toast, weddings, vacations, while the data is clear that younger generations are working and studying more to have less.
    While the advice the book offers does not change the circumstances, it can perhaps alleviate stress and help younger folks feel more in control of preparing for retirement.

  107. Julie on October 24, 2021 at 7:01 am

    Sounds like an interesting book for my husband and I who are thinking about retirement, though we still have many years to go before we can. We save a good chunk of our income every month, but I’ve never calculated it as a percentage. Off to do that now… Thanks Robb!

  108. Gin on October 24, 2021 at 1:30 pm

    Great idea! High schools should take more opportunities to financially educate teenagers moving into adulthood and a book review assignment of a book like this would be helpful.

  109. R on October 24, 2021 at 5:20 pm

    Rule this rule of 30. Perhaps we saved too much but we consistently saved 25% of our gross income (essentially maxing out both RRSP + TFSA) each and every year since 2009.

    We are on pace to achieve financial independence sooner than we think.

  110. Matt on October 29, 2021 at 9:39 pm

    Hi Robb, I’m 25 and saving about 85% of my income right now due to a unique and temporary work situation but normally save around 50%.

    Actually interested in the book mostly because I think I’m saving too much. Your writing about Coast FIRE really caught my attention.

  111. C on February 13, 2022 at 9:36 am

    Hi Robb I like the concept! I’ve passed this point, and have often sacrificed standard of living for savings, then if I really wanted something after some time, the money was always there. It’s always easier to spend a bit of savings if you save too much, can’t go back and get it later if it wasn’t saved in advance!
    I would pass the book to my children to prepare them just entering the workforce.
    Like your 2021 summary as well. A friend had recommended Vanguard to me, but I didn’t buy. Wish I had now!

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