If you want to retire by 65, you should be saving at least 20% of your gross income (starting at 20yo).

You would be worth 10s of Millions even with a modest income and modest RoR.

The 45 year term is the key here. Not so much the 20%, or the RoR.

I think 20% is an under-estimate in a lot of cases honestly

unemployment/funemployment raids on your savings rate throughout your working career imply imo that during 'good' times you'll probably need to exceed 20% to net out at 20% savings rate. Maybe 25% is a better target. Some years I'm 40%-ish after taxes [so like 25% of gross or 40% of net]

but as mentioned if you're willing to forget earlier dates of FI and accept working well into your 60s or even 70s, sure, saving less is fine.

and if you're already FI or whatever, saving anything at all isnt technically required

How can a family of 4 make it on $100K or less, save and pay for at least part of the college expenses, and save the 20% advocated here. Other than living in a small apt. and driving old cars which you fix yourself. Or are we not middle class, but paupers?

Fast 'n Fresh wrote:

More is better, of course.

That sounds about right because living to 90 is likely and if you need long term care or assisted living that will cost you at least $150K per year.

More is better and it's better to be safe than sorry.

If you guys would just purchase commercial properties along the way and keep them as rentals then you don't have to save anything as long as the properties are paid off at the time when you want to retire. Then you just live off of the rental income. And if you desire you can sell a few of them as they increase in value.

What if I make $10M+ per year?

It's clear that the naysayers don't own a financial calcualtor. Nobody cares about your thoughts ... it is a math problem. See this:

http://www.bankrate.com/calculators/retirement/retirement-plan-calculator.aspx

I put in the following:

Current age: 25

Age of retirement: 65 (40 yrs at work)

Annual household income: $ 40,000

Annual retirement savings: 20% of salary

Current retirement savings: $ 0

Expected income increase: 2%

Income required at retirement: 80 %

Years of retirement income: 20 (until age 85)

Rate of return before retirement: 8%

Rate of return during retirement: 4%

Expected rate of inflation: 3%

Read more:

http://www.bankrate.com/calculators/retirement/retirement-plan-calculator.aspx#ixzz4S0MYkYto

Follow us: @Bankrate on Twitter | Bankrate on Facebook

These are all VERY LOW or conservative estimates. You are likely to make more than $40K, likely to average more than 2% long term raises, and those rates of return are pretty conservative.

I end up with $ 2.4 Million when I retire and it won't run out for 80 years or so at that income level.

Make the term 45 yrs like the OP said and it results in $ 3.622 Million and if you take 80% after you retire ... it NEVER RUNS OUT.

Buy a financial calculator and play around with all the variables or just spend 20 minutes on this site or one like it ... you will start to figure out what the most important variables are.

Read more:

http://www.bankrate.com/calculators/retirement/retirement-plan-calculator.aspx#ixzz4S0LmfABj

Follow us: @Bankrate on Twitter | Bankrate on Facebook

I'm a rely on that fat pension that comes with a new Trump manufacturing job!

Military pension in about 14 yrs. Thanks guys.

Alan

5% above inflation is currently considered quite optimistic [not pessimistic]

and your 2.4m figure is not inflation adjusted either, nor are you allowing for any periods of unemployment or swimming backwards or health challenges or family struggles that could possibly get in the way.

That said tho 2.4m in 2016 dollars in 2061 wouldnt be the worst thing in the world.

not sure what simulation you're running on the withdrawl phase nor SS estimated payouts but we can all agree they'll be 'fine' I guess. The value of a 2016 dollay in 45 years is about $0.25

so the 2.4m is closer to $600k in todays dollars. And if you look at those retiring today/boomers, thats still doing far better than they are.

bogleheads/firecalc are pretty good sources for info imho

Runningart2004 wrote:

Military pension in about 14 yrs. Thanks guys.

Alan

Enjoy your welfare money!!!

777ddd wrote:

Fynanchals wrote:

I'm 30, have a low-paying job, and about $500 in the bank. No savings, 401k, or investments.

How am I doing? Should I go ahead and kill myself?

Well, at least Hillary won..............

Dude, 500k is more than enough

savingssavingssavings wrote:

I'm 33 and have been saving just in my 401k - 24% a year for the past 10 years. This year I bumped up to 31%.

How? I thought contributions were % capped way below that level.

46yo, married

$525k 401k

$150k 401k wife

$125k savings earning monthly income

$500k home owned

Owned vehicles, no debt other than property tax obligation.

Saving about 16% of current income through a couple outlets

We spent a lot of years watching things closely and dumping money toward house as extra principal. Moved from a 30, to 15, to 10 year note then decided to pay it off. It's a long process but time flies so you younger guys just keep plugging away.

That dumb idiot Trump is going to borrown so many $T you will need top save 50% of your income from 20 years old to reitre at 65.

Bretom wrote:

savingssavingssavings wrote:

I'm 33 and have been saving just in my 401k - 24% a year for the past 10 years. This year I bumped up to 31%.

How? I thought contributions were % capped way below that level.

Your company may have a % cap, but I have never heard of a federal % cap. I have put in 25% in the past. I would have put more but 25% was my company's max.

You just gave everyone a really good idea how much you make. You may not care at all but you tried to hide behind % numbers. You clearly make less the 55k a year. Not bad. But you sure sounded like you where bragging about those %.

There's several ways of saving over 20%. For most savers it would be something like, max 15% 401k contributions, 3% company match, plus $5,500 max Roth IRA contribution. If you max-out all the above options you can then pour savings into the purchase of a rental unit, non-tax deferred investments, or the least tax advantaged option would be straight cash savings.

It capped at a fixed $. Currently $18k if you under 55 I think. I forgot it went up the past 2 yeas. That guy makes less then $60k.