The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Clinical on May 14, 2018, 08:20:18 PM
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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.
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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.
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Go easy on your head: ignore "savings rate".
E.g., see Calculating 25X Expenses - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=249319) for related discussion.
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Do you have government subsidies? If you do, you need to take them into account in your calculation.