Reply to I Live Comfortably on Less than $70K After-Tax in DC Area

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I'm surprised that no one has called out only saving $8400 / year for retirement.

Maybe you're comfortable now...[/quote]
I get 100% match, so it's double. More than 20% of my income! which is more than the recommended 15%. I think I'm doing well in that area.[/quote]
Me again....I just did a calculation. Saving $19,000 a year earning 8% (stock average is more than 10%) would be more than $1,200,000 in 25 years. And that's assuming that I don't start increasing the amount of contributions, and it doesn't account for what I've already saved. I'll probably have $2 million at this rate, and that's just on my own.

Goes to show that one can earn around $85,000 or $90,000 (single, no kids), live comfortably, and save for a nice retirement.[/quote]

You use some fuzzy math, OP.  $8400 * 2 = $16,800, not $19,000, and since you're earning in the mid 90k's, that's not more than 20% of your income.

8% is a pretty aggressive assumption for gains.

I'm not saying you won't be fine, but it seems as though the assumptions you make are always skewed towards making your picture rosier than it is.  It doesn't strengthen your argument.

[/quote]
Actually, the reason it's "fuzzy" is because, remember, I am spending $70k after tax, which was based on an estimate of $85k - $90k. I was upfront that my income is somewhat more than that, and that's why there's an extra couple of thousand per year in savings. It's the "overflow." But you're right....it's not quite 20%. It is more than 15%, though, and a very respectable savings rate.

I think 8% is a realistic assumption. The stock market has returned close to 11% over time, so I'm being conservative. I think the people worrying about whether $3 million is enough for retirement, which I've also seen on this forum, are being too negative.

A nest egg of even $1 million (assuming I've been too aggressive, so I halved it) plus $2500 in social security (all in current dollars) plus a paid-off house will be fine! I'm not the one you should worry about. The real problem is the 50% of people who don't even have $25,000 by the time they're in their 50s. (Another topic, though.)

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