Quote:
Originally Posted by jcyuhn
No, it really is not. Play around with a portfolio calculator to see for how many years you have to save 16% of your income to reliably generate, say, 75% of your pre-retirement income. I think you'll be surprised.
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you are right. see below-
income=$100,000
years of service= 20 years
contribution= $16,000 (5.5% +10.5%)
target= 75% of the income= $75,000
growth rate=8%
withdrawal rate=4% (historically accepted % to avoid dipping into capital)
no pay raises (for simplicity)
the figure comes out to only: $29,000 per year! Less than half of the target!
Working for 30 years....... puts the income to $72,500 per year.
It's doable but there's a lot of moving parts!