Author Topic: Great retirement calculator  (Read 3197 times)

blackswan

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Great retirement calculator
« on: May 04, 2015, 10:22:01 PM »
The absolute minimum you're allowed to live on is 40% of your income! That may be reasonable for some but it boggles the mind how these calculators never just ask what your expenses are - rather it's phrased in the context of what % of your paycheck you blow through...
« Last Edit: May 04, 2015, 10:24:37 PM by blackswan »

AH013

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Re: Great retirement calculator
« Reply #1 on: May 06, 2015, 07:01:46 PM »
Not fully defending it, but I can see some logic there.  The minimum I'm allowed to live on is 35% of my income.  Any less than that and not only don't I get to spend a penny, I'm evading taxes.  Realistically they have to put something other than 0% otherwise it completely breaks the model, and something extremely small also probably violates some maximum bounds.

Most people honestly have no clue how much money they spend, so asking them how much $ do you spend a year isn't something they can answer.  Most worker bees are more apt to remember they contribute 5% to their 401k and save another 1% in a money market account or something, so they must be spending 94% of their income.

velocistar237

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Re: Great retirement calculator
« Reply #2 on: May 07, 2015, 10:37:05 AM »
It was on after-tax income, so taxes shouldn't factor into it.

A required income of 0% shouldn't break the model. The resulting nest egg would simply be zero. Restricting the number probably just has to do with using sliders on the GUI, or something like that.

thd7t

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Re: Great retirement calculator
« Reply #3 on: May 07, 2015, 02:34:23 PM »
Not fully defending it, but I can see some logic there.  The minimum I'm allowed to live on is 35% of my income.  Any less than that and not only don't I get to spend a penny, I'm evading taxes.  Realistically they have to put something other than 0% otherwise it completely breaks the model, and something extremely small also probably violates some maximum bounds.

Most people honestly have no clue how much money they spend, so asking them how much $ do you spend a year isn't something they can answer.  Most worker bees are more apt to remember they contribute 5% to their 401k and save another 1% in a money market account or something, so they must be spending 94% of their income.
That 35% is only the case if you are spending that much in retirement.  I don't even know how high into the 35% tax bracket I'd have to be before I was paying that much, though.  Our household makes in the mid 25% bracket, but our actual federal rate was about 8%.  If you are making $450k, you might get close, but you definitely need a better accountant (or to hire one at all), because you should be able to optimize better. 

Jags4186

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Re: Great retirement calculator
« Reply #4 on: May 07, 2015, 06:51:35 PM »
An even better one from the Dave Ramsey world:

chrishogan360.com Retirement IQ

The assumptions:

12% return
2.75% inflation
6% withdrawal rate

Head scratching to say the least...

SailAway

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Re: Great retirement calculator
« Reply #5 on: May 09, 2015, 07:04:51 PM »
An even better one from the Dave Ramsey world:

chrishogan360.com Retirement IQ

The assumptions:

12% return
2.75% inflation
6% withdrawal rate

Head scratching to say the least...
Ah, yes. The mythical 12% assumed return. hold on, I'm investing in a unicorn farm as we speak...

russianswinga

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Re: Great retirement calculator
« Reply #6 on: May 10, 2015, 01:20:17 AM »
That number, in its defense, does cover 95% of workable wage saving scenarios.

I consider myself mustachian, so does my spouse (my kid is 2 months old so she doesn't get a say yet). My wife is a stay-at-home mom for the forseeable future, and with mortgage+HOA for a 2-bedroom condo, and family health insurance that allows us to see a pediatrician on a proper schedule, we are over  50% of my take-home income, which is far from low even for Southern California. No, we don't have car payments, and yes, we save... but we could not realistically break that calculator even if we tried.