Comments on: Are you Saving Enough for Retirement? Check Out This Rule of Thumb

By: Dave Ramsey’s 7 Baby Steps: Step 4 - Invest 15% Of Household Income | Bible Money Matters

Wed, 18 Feb 2009 15:14:39 +0000

[...] how much money would you really need in order to have a comfortable retirement? Assuming that you would want 80% of your pre-retirement income to live on as many suggest, and a withdrawal rate of 4% per year and [...]

By: DR

DR — Sat, 05 Apr 2008 00:45:13 +0000

Mark, great questions. Here’s how it works. The 4% withdrawal rate in retirement assumes that your investments will earn about 8%. You’ll take out 4% and leave 4% to cover inflation. The next year you’ll still take out 4%, but it will be of a slightly higher amount (assuming no market declines) due to the 4% you left in from the prior year. As for current savings, it assumes you get pay increases that match inflation, so the amount you save goes up each year, even if your savings rate stays the same.

By: Mark

Mark — Fri, 04 Apr 2008 15:41:07 +0000

How do these calculations account for inflation? Unless I have a fundamental misunderstanding of how money works my annual income needs will double every 23 years. That is based on 3.1% inflation and the rule of 72. That means that the total I need to save increases dramatically. Since I reach 67 in 30 years I figure I will need 130% more total in savings than your calulations predict. Also that means that I will need to take out a slightly higher percentage of the total each year once I do retire. Is there a way to account for this?

By: The Financial Blogger | February Top Ten

The Financial Blogger | February Top Ten — Thu, 06 Mar 2008 11:01:23 +0000

[...] Are you Saving Enough For Retirement? Check Out This Rule of Thumb by The Dough [...]

By: Dave Ramsey's Step #4: A Visual Guide to Saving 15% for Retirement in a Roth 401(k)

Mon, 03 Mar 2008 11:56:00 +0000

[...] seeking to replace 80% of your income in today’s dollars (I’ve written before about the 4% withdraw rate rule for retirement [...]

By: FIRE Finance

FIRE Finance — Mon, 25 Feb 2008 02:34:19 +0000

Fantastic post. We cited it in our Sunday Review as one of our favorites.
Keep up the excellent blogging.
Cheers,
FIRE Finance

By: Adfecto

Adfecto — Sun, 17 Feb 2008 22:01:12 +0000

If I follow those tables I save too much. Instead I’d say save as much and as early as possible. If you are saving “too much” but are still happy with your quality of life then there is no harm and lots of future gain. I also want to replace 100% of my income and not depend on Social Security either. My proposed rule of thumb, save till it hurts when you are young and hold that percentage as you get older. For me that is 20% of my gross (not including the 401(k) match). In a few years that will be enough to max a 401(k) at $15,500 and a Roth IRA at $5,000.

By: Weekly Round Up - Catching Up Edition

Weekly Round Up - Catching Up Edition — Sun, 17 Feb 2008 21:24:27 +0000

[...] Dough Roller – Are you Saving Enough for Retirement? Check Out This Rule of Thumb. I still have over 30 years before I will reach “traditional retirement age of ~60, so I [...]

By: Prime Time Money: All-Star Weekend Roundup | Prime Time Money

Prime Time Money: All-Star Weekend Roundup | Prime Time Money — Sun, 17 Feb 2008 20:38:22 +0000

[...] Are you Saving Enough for Retirement? Check Out This Rule of Thumb at The Dough Roller [...]

By: Sunday Money Roundup - The Flu Attacked Our House Edition. | My Two Dollars

Sunday Money Roundup - The Flu Attacked Our House Edition. | My Two Dollars — Sun, 17 Feb 2008 15:01:52 +0000

[...] The Dough Roller asks “Are you Saving Enough for Retirement? Check Out This Rule of Thumb“. [...]