Silly and Misleading Retirement Calculators


I think the main reason people seem amazed at the idea of retiring at age. Thirty forty or even fifty is the lack of real information on early retirement. In general if you type retirement calculator into a search engine these days and enter some stats about yourself. You will find some very strange assumptions. That are guiding you to think you need an absolute load of money to retire for example. I was once working through such a guide in a magazine from northern. Trust a bank that caters to the wealthy. It went something like this. Consider your goals for retirement. What life events do you need to be prepared for. The following table lists average cost children's and grandchildren's university education. A hundred thousand dollars per child children's and grandchildren's weddings twenty five thousand dollars. Assisted care facilities a hundred thousand dollars per year. Medical costs funeral arrangements. Twenty five thousand dollars trust funds for loved ones esteem and legacy planning and charitable foundations. 'wow looks like you're well into the millions before you even get to buy yourself some groceries. Another retirement calculator on cnn. Dot com has various parts to fill out dropdown boxes pre filled with hand values like retiring at age sixty five and needing seventy percent of your maximum pre retirement income constantly for the rest of your life. The drop down box with seventy percent in it did not even offer a value lower than forty percent. This percentage of income concept is one of the most anti mustache ones out there if you make two hundred thousand dollars per year just before retiring this experience. Corrupt you so much that you need a hundred and forty thousand dollars per year for the rest of your life or is it possible to maintain the same luxury standards of a person who has a merely comfortable income like forty thousand dollars per year. This goes back to the ideas of the get what you need posting. I made recently and that is why not go for maximum happiness rather than maximum consumption. I propose that maximum happiness is achieved at a spending level where you live in a comfortable space. Eat healthy foods and get to do lots of active and stimulating things with friends. That doesn't have to cost a hundred and forty thousand dollars per year or even fifty thousand dollars per year for most of us the other assumption they push on people is a very low rate of savings they assume you will less than the annual limit on 401k contributions. And don't say much about what to do if you save more than that which the high income person mentioned a few paragraphs ago could certainly do so these banks and mutual fund companies will continue to tell you that you need millions of dollars to retire because it benefits them for you to invest your money with them. Luckily it's a harmless bit of tom foolery since the saving benefits you as well but the disservice they do is in scaring people out of dreaming to save faster or to think about much shorter time horizons like tenures instead of just plain old age. Sixty five so. I'll give you a quick retirement calculator of my own adult couple with no kids or whose children are. Grown can live very comfortably on forty thousand dollars per year and retirement. My own family lives very comfortably with one child on somewhere. In the twenty seven thousand dollar range you can shoot higher or lower depending on what level of luxury water pursue twenty. Two eighty thousand dollars is a good absolute maximum sane range. But if you don't want to calculate everything out just go for forty thousand dollars and figure out how to make your savings produce that for you for a single person. It might be difficult to slice in half because you lose some benefits from sharing a house in car but you can come close to quick early retirement budgets number one in early retiree couple lives on thirty thousand dollars per year. Earning five thousand of that combined in part time luxurious post retirement careers. The remaining twenty five thousand dollars per year is generated by their savings. Six hundred and twenty five thousand dollars of total savings are required to generate this amount of passive income using the four percent rule number two an early retirees single person leaves on twenty five thousand dollars. Earning ten thousand dollars on his or her many career. Fifteen thousand dollars per year is required from savings which calls for a nest egg of about three hundred and seventy five thousand dollars. I'm working on some much more detailed and exciting sample budgets using real numbers for my own spending experiences before and after retirement

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