Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (23) | Ignore Thread Prev | Next
Author: fredinseoul Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5069  
Subject: Savings Rate (long) Date: 6/9/2005 8:00 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi all. I wanted to see if anyone saw Kiplinger's Retirement planning guided for Fall 2005. One of the articles is called "Solving the 'How Much' puzzle."

It has a rather basic worksheet that factors in present income, 401K, Pensions and such, along with the value of your house and then with some tables, helps project growth and future needs.

I find the worksheet has some basic issues, but as a guestimation tool, it has some serious value to me. One of the biggest issues I see is that they suggest using 80% of your current salary as the amount you will need in retirement. I find that number to be very high. From the FIRE board, I remember a discussion that put the real number closer to about 50%. What are you using as your benchmark? The article does discuss cheaper clothing, commuting, etc costs, but they also point out that you will probably pay more for health care and possibly you will travel more. Still, many people who are aggressively chasing FIRE live on less than 50% now.

Another questionable entry I found is using your house as a source of your income in retirement. They discuss selling the house and having the first $250,000 as tax free. I know that, but is the house a part of your plan? I don't consider my house as part of my nest egg, simply because I live here. If I sold it, I'd have to find somewhere else to live. There would be costs associated with that. While I do expect my house to appreciate over time, I also expect it to shelter me. I'm certain I won't remain here until I die, I do expect to have my retirement house paid for when I retire. Am I missing out on a big part of my nest egg planning?

I've never really done the math to figure out how much I need to save, so this was an eye opener for me. According to the worksheet, I only need to save $200 more a month to retire in 20 years. I'm not sure that I trust that. It seems quite low. FIRE should be a touch harder, shouldn't it? :)

I am going to play with this worksheet to see if I find numbers that seem more reasonable. Anyone else seen the article?

fredinseoul
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (23) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Apple

Apple and Ninety Years Ago
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement