No. of Recommendations: 0
Author: jg4 | Date: 12/10/04 6:09 PM | Number: 43510
I wrote:
<<Of course, 70% is just a rough guideline, and accurate living costs should always be calculated before retirement. 70% is a good enough guess to use for long range estimates.>>

For many, it can be far less than that. Depends how much you were living below your means before retirement, retiring to a cheaper place, changing to a less expensive lifestyle, etc. Save until it hurts.

Yes, I agree. The 70% number is to maintain the same standard of living in the same place. If you are willing to do otherwise, you can reduce your retirement costs.

I wrote:
<<... $892,500, assuming 6% compounding, my BA-II calculator says you will need to save $1932 per month. That is 2.6% of your $75,000 salary.>>

I got 1932*12/75000 = 30.9% of $75,000. Maybe a bit agressive for someone making $75k.

Of course, you're right! That's what I get for posting in a hurry.

Also I got different numbers for the monthly payment required with your numbers. FV=892,500 at 6% for 25yrs, computes to $1288 per month, which is 1288*12/75000 = 20.6% of $75,000.

892,500, @6%, for 20 years comes out to $1932 per month.

But, I made the same mistake I did before with the percentage. It should have been 2.6% of $75,000 per month x 12 months, meaning you would have to save 30.9% of your $75,000 salary. Indeed a very high savings rate.

(I need to slow down a bit when math is involved - LOL)

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