Author Topic: How to calculate Child Care expense in Savings Rate  (Read 676 times)

Clinical

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How to calculate Child Care expense in Savings Rate
« on: May 14, 2018, 08:20:18 PM »
Just a quick question, I'm trying to rap my head around this savings rate calculation.  In order for my wife to work, we need to pay for child care.  Her hourly wage, $50/hr for 8 hours a day more than covers the cost of child care ($60/day).  Child care is obviously an expense and I'm guessing it should be added as an expense when calculating savings rate, correct?  But then how should I think about it when it comes to how long it will take to retire... my point being that we won't need the expense of child care once we retire.

ixtap

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Re: How to calculate Child Care expense in Savings Rate
« Reply #1 on: May 14, 2018, 08:36:55 PM »
Your savings rate and your projected budget in retirement are two separate things.

Your savings rate is not actually very useful. Your projected budget is essential for planning.

A lot of things will change for most people in retirement. Health insurance, commuting costs, travel expenses, for many even housing will change.

MDM

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Re: How to calculate Child Care expense in Savings Rate
« Reply #2 on: May 14, 2018, 09:15:20 PM »
Go easy on your head: ignore "savings rate".

E.g., see Calculating 25X Expenses - Bogleheads.org for related discussion.

Grogounet

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Re: How to calculate Child Care expense in Savings Rate
« Reply #3 on: May 14, 2018, 11:50:21 PM »
Do you have government subsidies? If you do, you need to take them into account in your calculation.