Saving the recommended 15-20%

So we all know the old adage of saving 15-20% - I might be blanking on this but now that my husband and I have a fully funded emergency account - are we supposed to say 15-20% directly into investments? We can’t think of other reasons to save ( we have money set aside for certain “projects” i.e. house updates, new toys, etc.)
Therefore, I’m wondering if that’s what “saving” is recommended to be - the rest going into retirement, joint brokerage accounts, etc?

Hi @kclessig! Thank you for the question!

When thinking about investing, one of the most important questions to ask is when you think you will need the money. The returns you receive from investing can be very unpredictable in the weeks and months ahead, but very predictable over decades. Meaning, it goes up and down in the short term and it goes up in the long term. If you haven’t seen this already, this PFC post does a good job illustrating that:

If you are investing for retirement, or anything else that is at least ten years in the future, the best route is to invest all of the savings, primarily in index funds that track the stock market. This is because you won’t need the money for a while so it’s okay if the stock market is volatile, because we know over time it goes up.

If you are saving to remodel your house in a year from now though, it’s best to put the amount of money you will need for the remodel in a high yield savings account or some form of account that won’t go down in value since you plan to use the money soon.

I hope that helps. Let us know if you have any other questions!