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July 26, 2010


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You forgot to factor for inflation in that retirement calculator, RJ. Ask anyone who starting saving for retirement in the '80s who thought they'd only need a few hundred thousand dollars to be retired comfortably now.

You're concept is sound, though. As I've said before: reducing overhead is more important than collecting dollars.

True. Didn't factor in inflation. Which makes the formula work well in the short-term, but a little misleading in the long-term.

And I can't type this morning: "calculation" instead of 'calculator' and "Your" instead of 'You're'. Just goes to show, we all make mistakes :)

Really like the idea of % of lifetime. I always look at how many hours I am working to purchase things.

I like and use both mind hacks.

Our early retirement plan concentrates on trying to save enough in the next 25 years to be able to live comfortably off of 4% or less, but cutting back our expenses is definitely our back-up option and probably something that will come naturally to us anyway since we'll feel weird without the monthly paychecks.

I also look at big expenses based on how much of our time will be spent working for them. It doesn't work well on small expenses though because we'll start justifying $10 purchase since it's only x amount of minutes...those minutes add up fast, lol.

Good ideas, thanks for the tips. I never thought about thinking about purchases as a percentage throughout life. I have in the past thought about how long I have to work for something though.

I guess I'm in big doo-doo. I have less than $100k in my 503b and I'm 73 and healthy mostly. Luckily, between SS & 2 small pensions, I can live on that and save some too. I use the 503b to do repairs and upkeep on my home. I also intend to live long. If I run out of money, I'll have to really get busy.

Actually, all my 503b is set up in a regular, not stock, account. When I first started it @ 1990-95, the interest rate was close to 7-8%. Now it is 2%. But, in the 4 years since I retired I have withdrawn just over $15.5k and yet, by year's end, when I withdraw my minimum, my total will only be down less than $1.5k. I think that proves the value of compounding interest. I love it.

Keep up the good work. I still can use financial information. Right now I am adjusting my income around in order to give 20% and save 20%. All prayers are appreciated for my success.

ok first of all people are living longer. If you retire at the age of 65 chances are pretty good that you'll live another 40 years. That's if nothing changes in medical sciences. it may be even longer than that, so you need to find out what the average inflation has been over the last 50+ years and add that to your savings as well, since the last thing anyone wants is to die, cold, broke and eating cat food(if you're lucky) also take into account that you probably wont have a mortgage to pay, then try to set up your plan from there. And remember, its better late than never.

This is an interesting way of looking at income and wants vs. needs. There is a fine line between what we want, what we need, and what we can truly afford. Unfortunately the savings patterns of Americans will probably go back to poor once3 the economy comes back. I am trying to save even more and will continue to the end.



Very insightful post! I'm familiar with the ideas, but for those who aren't, this stuff is enlightening. It's not for everyone though, because assumed that (in mind hack #1) you are actively planning/budgeting retirement, and (for mind hack #2) your job allows you to take that two-month vacation (or you're interested in retiring 2 months earlier).

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