Comments on: A really simple retirement formula http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/ Personal finance, commentary, and spending less the easy way Fri, 12 Mar 2010 04:59:46 -0400 http://wordpress.org/?v=2.8.6 hourly 1 By: GOWRI http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-92268 GOWRI Thu, 13 Sep 2007 09:34:34 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-92268 By the way check this company MDFI. Their stock is set to increase because of their association with Apple iphone and Complete Care Medical. Find more about this company and stock http://www.growurmoney.com/medefile/ By the way check this company MDFI. Their stock is set to increase because of their association with Apple iphone and Complete Care Medical. Find more about this company and stock http://www.growurmoney.com/medefile/

]]> By: Lazy Man and Money http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-50906 Lazy Man and Money Sat, 12 May 2007 21:35:00 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-50906 Thanks for the link... I guess my point could be summed up in an answer to this... "As for not touching the principal, wouldn’t it be nice knowing that you’re wealth pays for your lifestyle?" What if it takes you so long to save that your body and/or mind can no longer perform for that lifestyle? I like the idea of not making any assumptions, but it's impossible not to do. One can't assume that bank's will be able to give you a safe 5% in the future. What if the US dollar loses so much of it's value that $20,000 a month doesn't get you very much? So much can happen... Thanks for the link…

I guess my point could be summed up in an answer to this… “As for not touching the principal, wouldn’t it be nice knowing that you’re wealth pays for your lifestyle?”

What if it takes you so long to save that your body and/or mind can no longer perform for that lifestyle?

I like the idea of not making any assumptions, but it’s impossible not to do. One can’t assume that bank’s will be able to give you a safe 5% in the future. What if the US dollar loses so much of it’s value that $20,000 a month doesn’t get you very much? So much can happen…

]]> By: Q from $1 Million to My Name http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49258 Q from $1 Million to My Name Thu, 03 May 2007 17:48:09 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49258 The kicker here is that it's almost impossible to predict how much cash you're going to need per month when you retire. Impossible to accurately calculate. We have no clue what things will cost 25 years in the future, especially health insurance! Who knows what our habits as old retirees will be (will we vacation more or less, eat out more or less, etc etc.) So I am aiming for $1 million for starters and then I am not stopping once I get there. The kicker here is that it’s almost impossible to predict how much cash you’re going to need per month when you retire. Impossible to accurately calculate. We have no clue what things will cost 25 years in the future, especially health insurance! Who knows what our habits as old retirees will be (will we vacation more or less, eat out more or less, etc etc.)

So I am aiming for $1 million for starters and then I am not stopping once I get there.

]]> By: kurt http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49159 kurt Thu, 03 May 2007 00:14:04 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49159 One thing people forget about when they are planning for retirement is that a lot of their income may not be taxed the same way their earned income is. So, for example, if you currently make $100,000 a year and pay an average tax rate of 33% (roughly 25% effective income tax plus payroll taxes), this is equivalent to the income stream you'd get by withdrawing $78,824 out of a taxable investment account, assuming you pay capital gains on everything (some of it would be your basis, of course). Other source have different dynamics (roths will have zero taxes, IRAs will have the full 25%, but not the payroll). Food for thought. One thing people forget about when they are planning for retirement is that a lot of their income may not be taxed the same way their earned income is. So, for example, if you currently make $100,000 a year and pay an average tax rate of 33% (roughly 25% effective income tax plus payroll taxes), this is equivalent to the income stream you’d get by withdrawing $78,824 out of a taxable investment account, assuming you pay capital gains on everything (some of it would be your basis, of course).

Other source have different dynamics (roths will have zero taxes, IRAs will have the full 25%, but not the payroll).

Food for thought.

]]> By: kurt http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49151 kurt Wed, 02 May 2007 23:43:33 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49151 Oh, for some reason I was using the 5% from the second example! That's what I get for quickly looking up. Oh, for some reason I was using the 5% from the second example! That’s what I get for quickly looking up.

]]> By: kurt http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49149 kurt Wed, 02 May 2007 23:40:05 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49149 "Kurt, actually I think we both screwed up the calculation, but thanks for catching the mistake! (That’ll teach me to do things in my head that late at night.) 12% per year is about 1% per month, which is about $5,000/month — not $1,000 like I had or $2,000 like you had." My gut was right -- my, um, calculator was wrong. What on earth did I key in there... At least we're tied. “Kurt, actually I think we both screwed up the calculation, but thanks for catching the mistake! (That’ll teach me to do things in my head that late at night.) 12% per year is about 1% per month, which is about $5,000/month — not $1,000 like I had or $2,000 like you had.”

My gut was right — my, um, calculator was wrong. What on earth did I key in there…

At least we’re tied.

]]> By: tinyhands http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49111 tinyhands Wed, 02 May 2007 18:35:18 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49111 Life expectancy is an important part of the equation, since not all of us can expect to solely live off of the income generated by our savings. Most of us will need to plan on drawing down that savings, so having an idea of how long we'll be drawing down is as important as knowing how much. And since life expectancies are continually, slowly creeping upwards, I find it difficult to say that you're ever saving too much. Life expectancy is an important part of the equation, since not all of us can expect to solely live off of the income generated by our savings. Most of us will need to plan on drawing down that savings, so having an idea of how long we’ll be drawing down is as important as knowing how much. And since life expectancies are continually, slowly creeping upwards, I find it difficult to say that you’re ever saving too much.

]]> By: mbhunter http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49102 mbhunter Wed, 02 May 2007 17:20:56 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49102 Kurt, actually I think we both screwed up the calculation, but thanks for catching the mistake! (That'll teach me to do things in my head that late at night.) 12% per year is about 1% per month, which is about $5,000/month -- not $1,000 like I had or $2,000 like you had. As for not touching the principal, wouldn't it be nice knowing that you're wealth pays for your lifestyle? If your investments throw off $20k per month and you're only spending $10k/month, you aren't going to go broke. Kurt, actually I think we both screwed up the calculation, but thanks for catching the mistake! (That’ll teach me to do things in my head that late at night.) 12% per year is about 1% per month, which is about $5,000/month — not $1,000 like I had or $2,000 like you had.

As for not touching the principal, wouldn’t it be nice knowing that you’re wealth pays for your lifestyle? If your investments throw off $20k per month and you’re only spending $10k/month, you aren’t going to go broke.

]]> By: KMC http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49100 KMC Wed, 02 May 2007 17:09:05 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49100 "Who will bail you out if you miscalculate, though?" We're going to find out, because with like 50% of Americans having less than $25K saved for retirement, it's going to get ugly. “Who will bail you out if you miscalculate, though?”

We’re going to find out, because with like 50% of Americans having less than $25K saved for retirement, it’s going to get ugly.

]]> By: FMF http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/comment-page-1/#comment-49098 FMF Wed, 02 May 2007 17:02:10 +0000 http://www.mightybargainhunter.com/2007/05/02/a-really-simple-retirement-formula/#comment-49098 Cute. I'm more of a 4% guy myself, though. ;-) Cute.

I’m more of a 4% guy myself, though. ;-)

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