Thanks Frugalnacho
MooseOutFront - can you explain what you said, in terms of that calculator you linked to? Are you saying that I'd put 5% in the calculator?
"5% real returns net of inflation, that means that no matter what inflation does, I'm running estimates based on my portfolio beating inflation by 5%"
Ok, maybe I understand. You are, maybe, saying that if I have a certain amount invested, and the return is whatever percent, if its invested a good way (ie. indexes and stuff I learn here) then the return should be 7% or more (if i recall correctly), and so, the 2% is inflation, and the 5% left is all I want to look at, in terms of meeting my principle goal. The inflation is accounted for in that extra, and I'm not confusing my current investment totals with my ultimate goal?
I was always a bit slow in the word-problem math department. Forgive me.
I just looked up the Canadian inflation rate - its been around 2% for many years... but its also been as high as 12% in the 50s, 70s and 80s. So, do you assume its around 2%?
Zaga - Thanks for answering! I'm not sure i understood that, lol. He won't have enough available to live on until he's 55, because he has to keep working and contributing, and also can't access that money until that age. So... even if we saved independant of that enough to retire earlier, he'd lose out on the later amount if he stopped working early, right? Unless we save more ourselves and retire early and accept that he'll get less pension for having worked less years.
I'm also trying to figure out in all of this whether we could afford to own a home while we are putting this money away. But that complicates things so much... we would need to use our current stache as down-payment, which would reduce the compound interest effect. I was thinking of buying a cottage outside the city, to visit, rent out, and then live in after retirement, while just continuing to rent here the rest of our working lives... But back to the simple task of setting a numerical savings goal.