Frugality is a popular concept in the world of retirement investing.

A low cost of living has a double benefit – you spend less/save more, and a lower net worth is required to support early retirement.

But most people don’t want to live uber-frugally, ourselves included.

That’s why we just front-loaded it.

Front-loading Frugality

Front-loading is another popular concept in the world of retirement investing and tax minimization.

Time in the market is more important than timing the market, the saying goes. By contributing full amounts to 401k/IRA/HSA in the early months of the year, we maximize time in the market and delay tax withholding. I did this most years once my student loans were paid off.

Since the stock market always goes up, over the long term this can buy you a little bit of extra ROI.

This same principle applies across the decades.

Cascading tax deductions

In 2019, $19k in the 401k, $6k in the IRA, and $3.5k in the HSA seems to require an extra $28,500 or so. Possibly double that for a married couple / 2 savers.

But it is a lot less challenging than it seems.

Median income households with a 22% marginal tax rate would save $4,180 in taxes on the 401k contribution. Put that in an IRA and save an additional $920 in taxes. Put that into the IRA and save an additional $200 in taxes. And so on.

All told, $22,230 will buy you $28,500 in retirement savings, plus possible 401k contribution matching.

But I don’t have an extra $22,230 lying around!

Right you are. That’s a lot of money.

But at roughly 25% of a $100k annual income or 50% of a $50k annual income, it is in the ballpark of what is necessary to achieve extremely early retirement.

I suppose this is where frugality comes into play; not necessarily your typical coupon clipping and eating leftovers frugality, but the hard-core “I’m on a mission from God” variety.

We went above and beyond because it was fun, but 80% of the benefit came from focusing on the Big Four – housing, transportation, food, and taxes.

“But you guys lived like bums!”

aka “I don’t want to live like I’m poor forever!

Yes, excellent observation. We front-loaded frugality, and it was awesome.

But what is even more awesome is having the benefits of frugality (having lots of money) without the necessity of being frugal now that I’m old and soft.


Investing $22,230 at age 25 will eventually result in having lots of money (a 1-time payment will grow to ~$425k at age 65 w/ 7% cagr.)

Starting at age 35 will require saving 2x as much to get the same result. Starting at age 45 will require saving 4x as much.

Instead of spending $22,230 on bigger/nicer housing, having somebody else cook our meals, and one of those new fancy auto-mobiles, plus ~$6k on taxes, instead… we didn’t.

As a result, now we can have all of the pretty things and our freedom too. Pretending to be frugal for a few years is a rewarding game. Living like poor college students for longer than is socially acceptable means we can now live like… well, who cares what is socially acceptable?


Viewing frugality as a game allowed us to try things that seemed crazy at the time. “Why not, it might be fun!”

We no longer make our own soap, we let other people cook for us almost every day, and we have significantly upgraded our housing.

But some things stuck. Case in point, I didn’t realize just how much I disliked driving a car in a city until it was no longer an option (cuz I sold the car.)

But we still use a car regularly. Check out our 2018 Uber stats:

188 rides
$1223.57 spent
7 countries
Longest ride: 2 hr 29 min 57 sec ($38.97, Vietnam)
Most expensive: $58.08 (to Seatac airport)
Least expensive: $2.61 (Warsaw, Poland)
Average: $6.54
Median: $5.03

That is a lot cheaper than owning a vehicle (so it’s frugal?) but is also a significant lifestyle enhancement. (No parking!)

(This doesn’t include all of our transportation expenses, of course. I commute to the swimming pool a few times per week on Taipei’s public bikes at a cost of 17 cents each way, and we occasionally take the bus ($0.50) or the subway (<$1.))

Try frugal things. You might like it.


Front-loading frugality is a great life hack for anybody who enjoys the benefits of frugality without the long-term (subjective) disadvantages.

It allows compound interest to work longer and harder, so we need to save less and can spend more once the money snowball gains momentum.

Intentionally spending less also expands perspective, and allows discovery of wonderful lifestyles we are as of yet unaccustomed to (e.g. biking instead of driving.) Some of those life style enhancements will remain even as back-end spending grows.

(This post was recently inspired by several bottles of wine with some potential future aggressive savers. I hope they go for it. You know who you are ;) )

Are you front-loading frugality?