http://changecounts.com/how-much-will-i-need-to-retire.html Changing the way we think about money - Count me in! Sat, 07 Jan 2012 19:48:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://changecounts.com/how-much-will-i-need-to-retire.html/comment-page-1#comment-1371 Mack Sat, 27 Feb 2010 17:50:14 +0000 http://changecounts.com/how-much-will-i-need-to-retire.html#comment-1371 Eb, right, large losses are all around us right now, but some years there are large gains, much more than 12%... it is a planning tool. It depends on what you are invested in, and such. History confirms the 12%. Whether or not we get that in the future is anyone's guess. I am sure people back in the 70's would say the same thing, yet anyone who lived through the 70's and 80's knows what happened to the market. Eb, right, large losses are all around us right now, but some years there are large gains, much more than 12%… it is a planning tool. It depends on what you are invested in, and such. History confirms the 12%. Whether or not we get that in the future is anyone’s guess. I am sure people back in the 70′s would say the same thing, yet anyone who lived through the 70′s and 80′s knows what happened to the market.

]]> http://changecounts.com/how-much-will-i-need-to-retire.html/comment-page-1#comment-1367 eb Wed, 17 Feb 2010 23:08:09 +0000 http://changecounts.com/how-much-will-i-need-to-retire.html#comment-1367 This is great, but what about years such as 2008, where large losses were posted? This is great, but what about years such as 2008, where large losses were posted?

]]> http://changecounts.com/how-much-will-i-need-to-retire.html/comment-page-1#comment-303 Mack Fri, 04 Apr 2008 13:43:33 +0000 http://changecounts.com/how-much-will-i-need-to-retire.html#comment-303 Greg, thanks for the comment and you make a very good point. Sometimes I assume things and I tend to overlook effects of inflation, ( even though I am very aware of it).. Inflation and the time value of money gets so many people confused that I think they sometimes just decide it's all too complicated to understand. I want it to be simple. But you are correct and I need to change or re-write the post a bit.Actually, we need to get about 11% per year, ( if inflation is 3%) to keep up with inflation. A person would actually withdraw 8% of the balance in the account each year. So the actual withdrawal would be increasing each year, keeping up with inflation.I threw together a real dirty excel sheet to show this. You can download it from the link in the post above and see better what I am talking about. I still maintain that you only need the 500,000 dollars to return 40,000 a year, adjusted for inflation. The average return for growth stock mutuals over many many years is 12%. We only need 11% to make this work.Thanks again to Greg for pointing this out. He is right "on the money" on this. The bottom line is plan, plan, plan. Greg, thanks for the comment and you make a very good point. Sometimes I assume things and I tend to overlook effects of inflation, ( even though I am very aware of it).. Inflation and the time value of money gets so many people confused that I think they sometimes just decide it’s all too complicated to understand. I want it to be simple. But you are correct and I need to change or re-write the post a bit.Actually, we need to get about 11% per year, ( if inflation is 3%) to keep up with inflation. A person would actually withdraw 8% of the balance in the account each year. So the actual withdrawal would be increasing each year, keeping up with inflation.I threw together a real dirty excel sheet to show this. You can download it from the link in the post above and see better what I am talking about. I still maintain that you only need the 500,000 dollars to return 40,000 a year, adjusted for inflation. The average return for growth stock mutuals over many many years is 12%. We only need 11% to make this work.Thanks again to Greg for pointing this out. He is right “on the money” on this. The bottom line is plan, plan, plan.

]]> http://changecounts.com/how-much-will-i-need-to-retire.html/comment-page-1#comment-299 Greg Fri, 04 Apr 2008 02:02:17 +0000 http://changecounts.com/how-much-will-i-need-to-retire.html#comment-299 I think in your retirement calculator you have forgotten one very importatnt factor - inflation. You will not get a 8-10% return in a zero inflation world. If inflation is 3% then your $40,000 will need to be $41,200 in yr two. If your return is 8% and inflation is 3% then your withdrawal to not touch principal and keep up with inflation is 5%. (Technically it is not exaactly a straight subtraction but close enought to make the point). In that case to have $40,000 (and cover inflation for future withdrawals) you need $800,000 not $500,000. Quite a substantial difference. I think in your retirement calculator you have forgotten one very importatnt factor – inflation. You will not get a 8-10% return in a zero inflation world. If inflation is 3% then your $40,000 will need to be $41,200 in yr two. If your return is 8% and inflation is 3% then your withdrawal to not touch principal and keep up with inflation is 5%. (Technically it is not exaactly a straight subtraction but close enought to make the point). In that case to have $40,000 (and cover inflation for future withdrawals) you need $800,000 not $500,000. Quite a substantial difference.

]]> http://changecounts.com/how-much-will-i-need-to-retire.html/comment-page-1#comment-281 It Takes Money to Retire Not Age Sun, 30 Mar 2008 23:17:33 +0000 http://changecounts.com/how-much-will-i-need-to-retire.html#comment-281 [...] on Tax Rebate Stimulus Details Explainedjon thompson on Tax Rebate Stimulus Details ExplainedHow Much Will I Need to Retire? on How To Make A Million DollarsHow Much Will I Need to Retire? on 16 Roth [...] [...] on Tax Rebate Stimulus Details Explainedjon thompson on Tax Rebate Stimulus Details ExplainedHow Much Will I Need to Retire? on How To Make A Million DollarsHow Much Will I Need to Retire? on 16 Roth [...]

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