Retirement Planning per CNN

[bsmith]

Times are hard. It's going to be tough to retire if you need 100% of your income to do it: http://money.cnn.com/pf/money-essentials-retirement-how-much/index.html?sr=cnnmoney080115retire0930story

People need to hear that they should estimate their *actual* expenses instead of planning based on a percentage of their salary. Facepunch for CNN Money.

[DollarsAndDissonance]

Ha!  It's going to be awfully tough to save up that much money while spending 100% of your income.

[RosieTR]

Agreed.

Among many other obvious issues, the one that struck me: How in the name of heaven would it cost 100% of your income post-retirement to get a PhD? And if that were the case, why in the world would you do so (rather than take free online courses, audit some at Local U, or just visit the ol' library)?

[Ohio Teacher]

And their retirement savings planner will not let you move the slider beyond a 25% savings rate.  I get that the vast majority of readers are below that, but I don't see how programming this calculator to have such a narrow range is beneficial ie. what is gained by having an arbitrary maximum?  And of course, the "amount needed" is based entirely on a % of income and not actual spending.  There isn't even a box for spending.
http://money.cnn.com/calculator/retirement/retirement-need/?iid=EL

[MrMoogle]

And their retirement savings planner will not let you move the slider beyond a 25% savings rate.  I get that the vast majority of readers are below that, but I don't see how programming this calculator to have such a narrow range is beneficial ie. what is gained by having an arbitrary maximum?  And of course, the "amount needed" is based entirely on a % of income and not actual spending.  There isn't even a box for spending.
http://money.cnn.com/calculator/retirement/retirement-need/?iid=EL

And they won't allow you too retire before 50.

[forummm]

Even Vanguard's calculators limit your retirement age and savings rate to things more "typical". There would probably be people on some other forum making fun of VG and CNN if they let people save 90% of their income and retire at 28. "Who could possibly do that!"

[MrMoogle]

Even Vanguard's calculators limit your retirement age and savings rate to things more "typical". There would probably be people on some other forum making fun of VG and CNN if they let people save 90% of their income and retire at 28. "Who could possibly do that!"

This is very true.  It's the analytic inside me that says you should allow all scenarios, but that's also one of the reasons I'm here instead of forum.complainypants.com

Oh wait, I was complaining wasn't I?  Maybe I should go there :)

[sherr]

And their retirement savings planner will not let you move the slider beyond a 25% savings rate.  I get that the vast majority of readers are below that, but I don't see how programming this calculator to have such a narrow range is beneficial ie. what is gained by having an arbitrary maximum?

I agree with everything else you said, but in their defence...

The arbitrary maximum is beneficial beneficial precisely because they decided to make it a fancy slider instead of a box that you type a number into. If the slider went all the way from 0-100% then it would be next to impossible to get it precisely on the number that you wanted.

[sirdoug007]

Wow, that's a depressing calculator!

It is impossible to retire before 55 with that damn thing starting in your 20s.  Staring at age 22 with no savings, a $50k salary, and maxing the savings at 25% you can't retire until 58!  If you only save 10% you can't retire until 71 which includes social security.

There is some seriously constrained thinking about the concept of retirement baked into that calculator.  The MMM 60-70% savings rate, <30% income replacement, and 10 year career would probably make their heads explode.  They are assuming a nominal return of 6% and 2.3% inflation for a 3.7% average real return.  Thank goodness US stocks actually average 6-7% real over long time periods!

I understand the audience is the average Joe who thinks saving 5% is great and you have to retire at 67 because that is when you get SS, but the pessimism on display here is really extreme.

[Stache-O-Lantern]

The worst part is the income bar.  Because it bases the amount needed on the current income, if you play around and increase your income, then the result bars say your'e actually doing worse on a % basis.

If someone got a big raise, then . . . oh no!  I'm farther behind on retirement savings!  This calculator manages to turn lemonade into lemons.

[EricP]

The worst part is the income bar.  Because it bases the amount needed on the current income, if you play around and increase your income, then the result bars say your'e actually doing worse on a % basis.

If someone got a big raise, then . . . oh no!  I'm farther behind on retirement savings!  This calculator manages to turn lemonade into lemons.

That's the one thing a like about the Dave Ramsey/Chris Hogan Retirement IQ calculator.  It just straight up asks you how much you'll need in retirement instead of playing games with percentages of incomes.