Savings Goal
2025Savings projection with compound interest
At 4% returns, money doubles in 18 years; at 7%, about 10 years. A fast mental model for estimating long-horizon compounding.
Without a buffer, a job loss or medical bill forces you to sell investments at the worst time. Keep it in a high-yield savings or CMA account — not a brokerage.
Auto-transfer to savings the day your salary lands. Living on what remains — instead of saving what's left — is the most reliable way to raise your savings rate.
Contributing to IRP or pension savings funds earns a 13.2–16.5% tax credit immediately — before any market returns. That guaranteed yield is hard to beat anywhere else.
Frequently Asked Questions
How big a difference does compound interest actually make?
Save ₩500K/month for 20 years: at 0% you have ₩120M, at 4% compound about ₩183M, at 7% about ₩260M. A 3-point return difference creates a 60%+ gap over 20 years. The longer the horizon, the more dramatic compounding becomes.
How much should my emergency fund be?
Generally 3–6 months of living expenses. Dual-income households and stable careers can lean toward 3 months; freelancers and single-earners should target 6+ months. Keep it in a liquid account (high-yield savings, CMA) so you can access it immediately — not in a brokerage.
What return rate should I use in planning?
After-tax bank deposits typically yield 2–3%. Long-term diversified stock portfolios have historically returned 5–7% in real (inflation-adjusted) terms. If you're cash-heavy, model 3–4%; for long-horizon diversified investing, 5–6% is a reasonable conservative estimate. Past returns don't guarantee future results.
How do I realistically increase my monthly savings?
Three levers: ① automate the transfer on payday so saving happens before spending, ② audit recurring bills (telecom, subscriptions, insurance) every 6 months, ③ direct at least 50% of every raise straight into savings. Doing just these three can raise your savings rate by 5–10 points without feeling the pinch.
Savings accounts vs. investing — where do I start?
Money you'll need in 1–2 years (wedding, moving, car) belongs in savings or bank deposits. Money with a 5+ year horizon (retirement, tuition, long-term housing) belongs in diversified investments. Matching the time horizon to the asset class matters more than picking winners — short-horizon money in stocks can force you to sell at a loss.