The Motley Fool Discussion Boards

Previous Page

Retirement Discussions / Retire Early.

URL:  http://boards.fool.com/galagan-says-heres-some-info-about-me-age-32-18206430.aspx

Subject:  Re: Arbitration Date:  11/25/2002  2:16 PM
Author:  sozenne Number:  24 of 67

galagan says:
Here's some info about me:

Age: 32
Salary: X/year (if the threads make it clear that I need to be less vague, I will deal with that later)
Benefits: health insurance, 401(k) with partial match, term life
Net worth: 4X
Living expenses: 0.3X/year


Great idea! I think another relevant piece of info would be

taxes: ???X/year

Did you include taxes in the living expenses? What I'm getting at is how much X per year are you saving (0.7X/year would be amazing!!!)? In order to predict when one will reach FIRE, we need to know a few things, some of which we have to make educated guesses about. Off the top of my head, these include:

living expenses (post retirement phase)
rate of savings
rate of savings growth
inflation rate

With this info, we can predict how the nest egg will grow. Then we just have to pick a number for "enough" and quit our jobs. The REHP study is a great starting point, but obviously past performance is no guarantee of future results. I've seen amateur statisticians argue quite reasonably that the 100+ overlapping periods used are not statistically independent (they overlap!), so there aren't really 100+ data points, there are many fewer than that (3-5 IIRC). Not exactly the sort of stuff to make me sleep well at night.

I've seen some Mo