How much should you be saving? goto
http://finance.yahoo.com/calculator/retirement/ret02
Link is a simple retirement calculator. Calculator tells you how much you will need to save every year for retirement. 10 inputs takes 2 minutes.
semi educated assumptions or guesses:
inflation 3%
gov Cd's plan on 4% (current rates lower, not sure this is a good historic number)
stocks pay 10% (historic average going back 1900's)
spent 100% of your current income.
Very eye opening. Biggest effect on savings rate required is rate of return (compound interest is a magical magmatic beast) I found it very hard to retire at a reasonable age using Cd's rate of return (5%) but it is certainly possible to do. Second biggest effect is age of retirement.
At 1% savings rate the Average American is going to be working long past 60.
Love,
the Maven
8 comments:
hmmm...I really with I understood any of this. I feel like it just might be important.
I hate mavens. Good thing I fancy you more of a cheapskate than a maven. tee hee.
Had to look up Maven, but the rest of it is good advice. Your dad remarked to us that he's impressed with how much money you manage to save when we visited him.
being "cheap" does have its advantages. Although lately I have been loosening up a little, matter of fact old chet would be pretty upset with new chet.
Woo, on track to retire at 50.
pretty good!
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