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139% retirement savings!

January 23rd, 2007 at 06:56 pm

So I followed a link just to see what my retirement saving should be, I know it isn't where it should be right now, but I was just curious how far off it was...

you ready for this?

According to the calculator I should be saving 139% of my yearly income (well of my husbands, since I don't make any)

err yeah, I read it again, not a typo of mine, they said 139%! Exactly how am I supposed to do that?

I also looked at the graph and it says I would make the exact same salary for the next 40 some years, at which point I will switch to withdrawing my retirement, which goes up every year....err somehow that seems backwards, wouldn't I make more as I work, and need less as I grow old? (to a point)

I am not sure what a real retirement calculations would be, but I can understand why so many don't even bother if we are supposed to save more than we make, we might as well give up and enjoy the loot while it is here!

This is not to say I don't want to save for retirement, just that calculators may do more harm than good!

Posted in Complaint department | 9 Comments »

9 Responses to “139% retirement savings!”

  1. JanH Says:
    January 23rd, 2007 at 07:43 pm 1169581415
    1169581415

    Yikes! According to that, we're all in deep trouble!

  2. sarah Says:
    January 23rd, 2007 at 07:45 pm 1169581528
    1169581528

    That ridiculous

  3. LdyFaile Says:
    January 23rd, 2007 at 08:10 pm 1169583024
    1169583024

    Where is this calculator? I'm curious to see what it says about me.

  4. DivaJen Says:
    January 23rd, 2007 at 08:56 pm 1169585792
    1169585792

    If you set goals the were high enough, without a certain amount already in retirement savings, and with only a limited number of years to contribute before you start collecting, then you could easily create a situation where you need to save an extremely high amount in order to attain your goal.

    What did you say you needed per month in retirement, and when did you say you wanted to start collecting your retirement income? How much did you say you could put away per month?

    (No need to really answer. These are just questions that come to mind in thinking about the results the calculator gave you.)

  5. princessperky Says:
    January 23rd, 2007 at 09:45 pm 1169588752
    1169588752

    Didn't save the link, sorry Frown.

    and as for how many years...not all certain, I put in his age and his current income, left the rest standard, might be my trouble. Thanks for the thoughts.

  6. fern Says:
    January 23rd, 2007 at 09:48 pm 1169588909
    1169588909

    The standard rule of thumb for retirement withdrawals is that you can safely withdrawl 3% the first year, 4% the next year, 5% the next year and so on; if you don't exceed these amounts, you will never have to withdraw principal, only interest. It's based on cumulative compounding.

    I think that's what they meant when you said you didn't understand why you'd take out more and more each year.

  7. Broken Arrow Says:
    January 23rd, 2007 at 11:50 pm 1169596241
    1169596241

    That's really insane!

  8. Chris Says:
    February 8th, 2007 at 02:16 pm 1170944175
    1170944175

    Actually, the best rule of thumb to make sure that your retirement accounts don't disappear before you die, is to take 4% to 4.5% every year in retirement.
    There's an economics columnist in Texas that wrote a book with another author, and they did a lot of calculations to figure out that based on ebb/flow of interest one earns on investments to figure out the above percentages. His name is Scott .

  9. fern Says:
    February 8th, 2007 at 08:20 pm 1170966023
    1170966023

    I stand corrected, chris is right that you shouldn't exceed 5% each year if you don't want to tap into principal.

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