Author Topic: retirement calculator - completely wrong?  (Read 3236 times)

offroad

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retirement calculator - completely wrong?
« on: January 15, 2013, 06:35:30 AM »
was toying around with the free retirement calculator on FIDELITY INVESTMENTS web site. found it might be completely wrong. it says i will have over $1m when I retire. find that unbelievable.

am 50 now.  have $200k in 401k. am contributing the maximum i can into the 401k yearly ( including the catch up amount)  would like to retire before age 65. lets say i get a pension of $20k per year at retirement.

Do not own a house (taxes and maintenance and insurance and interest and commute costs more than my rent).

are there better calculators for retirement?

twinge

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Re: retirement calculator - completely wrong?
« Reply #1 on: January 15, 2013, 06:57:35 AM »
Quote
http://www.firecalc.com/

A perennial favorite with lots of ways to tweak your options.

sol

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Re: retirement calculator - completely wrong?
« Reply #2 on: January 15, 2013, 10:58:15 AM »
Sounds reasonable to me.  Maxing your 401k plus catch ups for 15 years from a base of 200k could hit a million, assuming the market doesn't crash.

yolfer

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Re: retirement calculator - completely wrong?
« Reply #3 on: January 15, 2013, 11:59:08 AM »
You could use a simple calculator like

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

to double check that math.

With the following inputs...

Current Principal: $200,000
Annual Addition:  $23,000 (max contribution in 2013 + catchup)
Years to Grow: 14 (retire at 64..."before age 65")
Interest rate: 5% (this is the only unknown so I guessed)

Result: $869,293

Grow a bigger mustache to save a bit more over that 14 year period and you've got yourself a million. Of course if your mustache grows while you're saving and you can live on a smaller amount of money, you may no longer need to get up to a million.

Play around with the numbers and see how things change. Keep in mind it's all just a wild guess.

Hope this helps!

tooqk4u22

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Re: retirement calculator - completely wrong?
« Reply #4 on: January 15, 2013, 12:29:12 PM »
As others said it looks right to me - $200k upfront plus $23k for next 15 years at 6% (given age assume more conservative balance) and you get $1,014,000.

But keep in mind that assuming 3% average inflation that equates to $650k today and assuming 4% SWR you would have to be living on $26k today.