AAR32 - Listener Q&A: How to Calculate Your Real Savings Rate
The Investing for Beginners Podcast - Your Path to Financial Freedom
Step 3: Convert 401(k) To After-Tax Equivalent
Evan shows reducing 401(k) contributions by your effective tax rate to compare to post-tax savings.
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In this listener Q&A episode of At Any Rate, Evan Raidt answers two practical questions from Keaton: how to estimate the after-tax value of 401(k) contributions, and how to save for unpredictable big expenses like car repairs and home maintenance.
First, Evan explains why 401(k) dollars can’t be compared directly to normal spending or savings—because they’re pre-tax. Then he shifts to emergency funds: where to keep them, what they should cover, how much to aim for.
Topics Covered:
Why 401(k) contributions aren’t apples-to-apples with normal spending
A simple method to estimate your effective tax rate and convert 401(k) contributions to an after-tax equivalent
Emergency funds
What emergency funds should cover
Timestamps:
00:59 Welcome back
02:14 Keaton’s questions: after-tax 401(k)
03:41 Why 401(k) money can’t be compared directly to other dollars
05:34 What this “after-tax equivalent” is for
06:21 Step 1: find taxable income on your last federal tax return
07:32 Step 2: estimate effective tax rate
09:10 Step 3: reduce 401(k) contributions by that rate (apples-to-apples
12:23 Emergency fund basics
14:29 Why a credit card is NOT an emergency fund
21:33 How much to save
Resources Mentioned
The Value Spotlight Newsletter: https://einvestingforbeginners.com/value-spotlight-newsletter/
Free monthly budgeting spreadsheet: https://einvestingforbeginners.com/budget/
Podcast survey: https://einvestingforbeginners.com/podsurvey/
Email Evan: evan@einvestingforbeginners.com
Have questions or want your story featured? Email the show at newsletter@einvestingforbeginners.com or comment below. Your feedback shapes the podcast!
Remember, invest with a margin of safety—emphasis on the safety. Have a great week, and we’ll talk to you next time.
Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening.
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