8 Bit WWBG
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Post by 8 Bit WWBG on May 29, 2011 7:09:22 GMT -5
4 years and 80% to go.
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DVM gone riding
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Post by DVM gone riding on May 29, 2011 16:43:16 GMT -5
5 yrs and 75% to go
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steph08
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Post by steph08 on May 29, 2011 19:44:18 GMT -5
At age 25, I have .75x of my current salary saved, and if I continue at the same contribution rate (which I plan to), and get an average 7% return (I am averaging high 8s, but I lowballed it just in case), I will have 4.375x my salary saved by the age of 35.
Not sure if it is because I started early (at 22 contributing 10%), or because my employer contributes an additional 9-10% every year as well, or because I make a lower salary than most of the people here. Probably a combination of all three.
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SVT
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Post by SVT on May 29, 2011 19:56:50 GMT -5
For clarification, are we talking money saved minus liabilities (net worth) or just money saved up?
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Deleted
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Post by Deleted on May 29, 2011 20:29:06 GMT -5
I made it a combined salary for us and since we are both 26 we have 9 years and 80% to go.
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Deleted
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Post by Deleted on May 29, 2011 20:29:45 GMT -5
For clarification, are we talking money saved minus liabilities (net worth) or just money saved up? I believed it is money saved up, but I might be wrong.
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DVM gone riding
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Post by DVM gone riding on May 30, 2011 11:48:28 GMT -5
money saved--retirement accts are protected so unless you empty them yourself for your liabilities your liabilities can't count ags them!! I also wasn't incl cash in EF type accts just my retirement savings. I do think people like Paul where most all of their value is in something like RE have to figure it out dif but I also think it is easier to be wiped out when you are borrowing to reinvest in the same vehicle all of the time, isn't that what happened to DR? He was worth a lot and then he wasn't worth anything!
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jd2005
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Post by jd2005 on May 30, 2011 11:48:38 GMT -5
For me, I was 35, 21 years ago, and going through a divorce. Was married for about 12 years and could not manage to save much at all. The typical marriage issues... 3 children, unmotivated wife who was more than satisfied to live pay check to pay check, etc. At the finalization of my divorce, I owed my lawyer $9000, and had $8000 in cc debt. Had maybe $4000 in assets. Wasnt until I shed that yoke was I able to do something. 21 years later, I have no debt, $1.3 million assets, full funded retirement plans, niced sized emergency fund, etc. You give me hope. Thanks!
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svwashout
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Post by svwashout on May 30, 2011 13:13:36 GMT -5
Probably should be more if you want to retire early. They say you can withdraw 4% per year forever so if you don't depend on job or social security, you'd want to accumulate 25x by then. If you're aiming to retire at 55, and assuming 10%/year growth in your net worth, you'd want to be at 3.7x at age 34, which is pretty close to Dr Stanley's formula. Of course it would be less if you spend less than you make. Or if you work to 65, in which case 1.4x should be fine under the same assumptions.
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DVM gone riding
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Post by DVM gone riding on May 30, 2011 17:33:37 GMT -5
you know the 4% rule just assumes you want to leave something, I hate that rule!! it assumes your assets will grow at least that amount (reasonable) and can there fore take that amount out without touching principle. Personally I intend to spend and enjoy my money. I am 30 and have no kids, while i would like kids I also want someone to share responsibility of said kids with, I don't have that, so I might never have kids but either way I see no reason not to spend all of money in retirement, I don't want to leave kids with debt just a legacy of hard work begets just rewards, and they can have the house---or two or three or whatever.
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dancinmama
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Post by dancinmama on May 30, 2011 17:54:07 GMT -5
you know the 4% rule just assumes you want to leave something, I hate that rule!! it assumes your assets will grow at least that amount (reasonable) and can there fore take that amount out without touching principle. Personally I intend to spend and enjoy my money. I am 30 and have no kids, while i would like kids I also want someone to share responsibility of said kids with, I don't have that, so I might never have kids but either way I see no reason not to spend all of money in retirement, I don't want to leave kids with debt just a legacy of hard work begets just rewards, and they can have the house---or two or three or whatever. I agree. We plan to spend all of our retirement savings and leave the home for DS.
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Wisconsin Beth
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Post by Wisconsin Beth on May 31, 2011 10:27:11 GMT -5
I have a really dumb question based on this part of the article "The best yardstick is the size of your nest egg relative to your income. To quit working at 65 with a decent shot at replacing 80% of your pre-retirement earnings, you'll need savings equal to roughly 12 times your income (that assumes you'll collect Social Security but no pension). "
DH and I basically make 100K. We put 20% into 401K/457, which is pretax, so we're at 80K. Am I assuming 80K for income or should I be using 80K-taxes=amount? All the calculations I've done have been based on 80K and it just struck me today that I may be doing this wrong...
Thanks, Beth (who feels really clueless today...)
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dancinmama
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Post by dancinmama on May 31, 2011 10:45:52 GMT -5
I have a really dumb question based on this part of the article "The best yardstick is the size of your nest egg relative to your income. To quit working at 65 with a decent shot at replacing 80% of your pre-retirement earnings, you'll need savings equal to roughly 12 times your income (that assumes you'll collect Social Security but no pension). " DH and I basically make 100K. We put 20% into 401K/457, which is pretax, so we're at 80K. Am I assuming 80K for income or should I be using 80K-taxes=amount? All the calculations I've done have been based on 80K and it just struck me today that I may be doing this wrong... Thanks, Beth (who feels really clueless today...) beth: I'd like to know this too. I THINK it's a benchmark, but I've never read any specifics as to whether it is 80% of pre-retirement gross or 80% of pre-retirement net. In our case, we will be able to live off of A LOT less than 80% of DH's pre-retirement gross. That is taking into consideration that we will no longer be paying payroll taxes, state disability insurance, special accident insurance, life insurance or contributing to the 401k; we will drop down a bracket regarding income taxes, but we will be paying substantially more in health care premiums/costs. I don't think that there can be any hard and fast rule that can be applied to everyone.
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Firebird
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Post by Firebird on May 31, 2011 10:48:01 GMT -5
Hmm, we've got about $125k to go and DF will turn 33 in five years, which is around $25k a year. Definitely doable at our present rate.
I've got eight years to go, which is $15,625/year. That basically "is" my retirement savings right now. Even more doable.
So we should easily make it... it's nice to hear one positive bit of news this morning! ;D
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thyme4change
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Post by thyme4change on May 31, 2011 10:49:41 GMT -5
I have to save $350k in 3 years.
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thyme4change
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Post by thyme4change on May 31, 2011 10:50:39 GMT -5
Actually - two and half years.
Can I average my husband's and my ages, since I'm using our combined income and our combined net worth? That would mean that I would have 5 years to save $350k.
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Deleted
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Post by Deleted on May 31, 2011 10:51:45 GMT -5
Piece of cake. (Sometimes my low income works to my advantage). LOL
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cronewitch
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Post by cronewitch on May 31, 2011 11:03:40 GMT -5
When you get near retirement you will fine tune your budget the 80% rule is a rule for young people.
I am 63 so can see retirement from here. I have stopped or greatly slowed saving now. I will have a mortgage, but I know the amount unless I move. I will not pay Social Security or need to save money and will have roommate income the first few years.
So I will go from earning 58,800 gross to SS of about 18,000, Roommate of 8,000, and can live on about 36,000 so need about 10K from investments and 20K will make me feel rich and take care of the loss of roommate income in the future or added medical cost as I age. So for me I need about 500K and have about 550K.
Retirement expenses include new expenses for medical, dental, vision, care givers, house hold help and more entertainment and travel.
If you lived on 30K pre retirement you aren't used to living high on the hog so a modest retirement income is more acceptable. If you lived on 250K pre retirement you would be able to live much cheaper but it would suck.
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Wisconsin Beth
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Post by Wisconsin Beth on May 31, 2011 11:22:32 GMT -5
I have a really dumb question based on this part of the article "The best yardstick is the size of your nest egg relative to your income. To quit working at 65 with a decent shot at replacing 80% of your pre-retirement earnings, you'll need savings equal to roughly 12 times your income (that assumes you'll collect Social Security but no pension). " DH and I basically make 100K. We put 20% into 401K/457, which is pretax, so we're at 80K. Am I assuming 80K for income or should I be using 80K-taxes=amount? All the calculations I've done have been based on 80K and it just struck me today that I may be doing this wrong... Thanks, Beth (who feels really clueless today...) beth: I'd like to know this too. I THINK it's a benchmark, but I've never read any specifics as to whether it is 80% of pre-retirement gross or 80% of pre-retirement net. In our case, we will be able to live off of A LOT less than 80% of DH's pre-retirement gross. That is taking into consideration that we will no longer be paying payroll taxes, state disability insurance, special accident insurance, life insurance or contributing to the 401k; we will drop down a bracket regarding income taxes, but we will be paying substantially more in health care premiums/costs. I don't think that there can be any hard and fast rule that can be applied to everyone. Well, at 80K, we've got a bit over 3x in retirement funds at 40/41. At 60K (80K-rough guess of taxes/FICA/etc. of 20K=60k), we've got 4.3x. And that's not counting my pension or SS or equity, it's just straight up retirement accounts. So I guess we're doing ok there after all.
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kiskis
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Post by kiskis on May 31, 2011 12:46:23 GMT -5
With combined salary, DH and I have passed it at 27, but we are relatively low earners and are aiming for early retirement, so we have to be aggressive savers. Not really sure how well any of these general benchmarks work. I need a crystal ball.
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Post by BeenThere...DoneThat... on May 31, 2011 12:50:13 GMT -5
With combined salary, DH and I have passed it at 27, but we are relatively low earners and are aiming for early retirement, so we have to be aggressive savers. Not really sure how well any of these general benchmarks work. I need a crystal ball. ...a Magic 8 ball would be cheaper and just as effective... ;D
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kiskis
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Post by kiskis on May 31, 2011 13:16:54 GMT -5
...a Magic 8 ball would be cheaper and just as effective... ;D Do they come with a warranty? Three "ask again later"s and it'd be smashed against the wall. Maybe I'll just flip a coin. ...a penny of course.
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achelois
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Post by achelois on Jun 1, 2011 17:39:49 GMT -5
I have a crystal ball. Inside the ball is the figure of a wrinkled old woman pushing a shopping cart. Above the woman is a neon sign flashing: bag lady...bag lady...bag lady
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telephus44
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Post by telephus44 on Jun 2, 2011 9:37:25 GMT -5
Well, if I average our ages and salaries - we're 35 now and have 70K to go. We're not that far off.
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shandi76
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Post by shandi76 on Jun 2, 2011 10:10:37 GMT -5
I'm 34 and meet the benchmark for a 45 year old? That seems low Of course, as my colleagues keep pointing out, I don't have kids.
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