Funny Lifehacker Post & Comments

[Le0]

http://lifehacker.com/the-easy-way-to-calculate-how-much-youll-need-to-save-1539111110

[arebelspy]

Yeah, any retirement calculation based on income is immediately suspect.

Comments are amusing.  It really is interesting to see how people think about money.  Quite different than those of us around here do.

[tariskat]

" I have no idea what percentage of my income goes towards the kids, but its a lot."

Perhaps having an idea of your spending would help you out then, lol.

I feel bad for them 😥

[4alpacas]

This comment (and the replies) made me cringe. 

"Forgive my ignorance, but how in the world does anyone save 20x their current salary? Taking the $100K/yr example and assuming a 5% matched retirement plan (so 10% of salary invested annually) and a generous 6% annual return on investments, in 30 years we'd have $791K. That's a million short of the $1,800K suggested.

I have to crank the savings up to 23% (18%+5% matched) to get to $1.8 mil in 30 years. I live well below my means and putting a fifth of my salary into investments each year still sounds pretty challenging."

"They don't. That's the simple answer. With other life issues that need acknowledgment (kids, changes in the economy, kids, student loans, kids, oh, and did I mention kids?), you probably aren't going to get anywhere near 20% of your income or whatever going to retirement until you're well into middle age. That's my experience."

[Elaine]

Wow, the comments are ridiculous

[4alpacas]

Wow, the comments are ridiculous

I can't stop reading them...

"So....what you are saying is that I will never retire, or that I should plan on dying very soon after retiring! x-) But for real though, despite political stupidity, we live in the Star Trek age. 20 years may not be enough!"

[Ambergris]

This is pretty funny.  However, I can remember when I thought that saving 20% of my income was impossibly ridiculously much, and had no idea how it was possible.  Times have changed, but everytime I want to laugh too hard at folks like this, I remember the ol' days...

[Ayanka]

I think that for some people it might be a start. Not the best possible of starts, but it is a calculation you can make in a couple of minutes and it gives an aim. If it helps to get even a couple of people into maxing out their retirement vehicles, I think it would be worth it. I am not saying it is correct, but I think that because you can't predict the future, this might be as good as some way more complex systems for some folks.

[Elaine]

This is pretty funny.  However, I can remember when I thought that saving 20% of my income was impossibly ridiculously much, and had no idea how it was possible.  Times have changed, but everytime I want to laugh too hard at folks like this, I remember the ol' days...

Me too! That's actually why I like the wall of shame and comedy. Not so much to point and laugh at other people- but to remind myself of the normal way of thinking (which I used to be part of, and still am in certain ways).

[thd7t]

Okay, I agree that this was a pretty ridiculous set of responses, but I saw that article and was excited about a possible discussion.  I even commented about replacement rate, because I thought it would ease some of the panicky responses.

[MgoSam]

Yeah for the person that is wondering how to save 20x income, I would point them to MMM, he can share how to much better than I can.

Man I wonder how many working men and women believe that it is impossible to save money? If only they realize that it is possible, many of them would likely make strides in saving more and enable themselves to retire early (if that is their desire). There are so many people that just don't believe that they are capable of saving money, yet by doing something like setting up a direct deposit to Vanguard they can take out the guesswork and instead save without thinking about it. This is what I do, and this way I don't need to think about how much to invest, instead the decision has already been made.

I am 26 and based on inflation being estimated at 3% and returns at 8% I should hit FIRE by the age of 35.

[MgoSam]

Yeah for the person that is wondering how to save 20x income, I would point them to MMM, he can share how to much better than I can.

Man I wonder how many working men and women believe that it is impossible to save money? If only they realize that it is possible, many of them would likely make strides in saving more and enable themselves to retire early (if that is their desire). There are so many people that just don't believe that they are capable of saving money, yet by doing something like setting up a direct deposit to Vanguard they can take out the guesswork and instead save without thinking about it. This is what I do, and this way I don't need to think about how much to invest, instead the decision has already been made.

I am 26 and based on inflation being estimated at 3% and returns at 8% I should hit FIRE by the age of 35.

And the reason it is going to take me 9 years is because I have a fairly low salary right now and I am not accounting for any raises (likely going to happen but I would prefer to plan conservatively just in case I don't). Also I am planning to likely need to spend more money than I currently am, again conservatively thinking.

[LalsConstant]

While I agree that the article is suspect and the comments steeped in learned helplessness,  I will be complainypants here and say FI isn't some trivial thing.  I believe nearly anyone can become FI but I also think it's a goal requiring over 20 years of work for most people.

A 35% personal savings rate is viewed as impossible by most people and it won't get the job done in less than 25 years using back of the envelope math.

[sherr]

Yeah for the person that is wondering how to save 20x income, I would point them to MMM, he can share how to much better than I can.

Yes but if people believe they need 20x income then that really is nearly impossible for anyone. That would be a 50% savings rate for 40 years! 20x expenses is much more doable, especially if you have a high income.

[arebelspy]

Yeah for the person that is wondering how to save 20x income, I would point them to MMM, he can share how to much better than I can.

Yes but if people believe they need 20x income then that really is nearly impossible for anyone. That would be a 50% savings rate for 40 years! 20x expenses is much more doable, especially if you have a high income.

Only if you spend that all along the way.  You could have lower expenses when working, save more, and then FIRE with an amount that was equal to your old income, and much higher than your old spending.

And you aren't taking compounding into effect.

But your point remains - saving based on income, rather than expenses, is silly.  :)