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What percentage of income allocated to savings...
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What percentage of income allocated to savings is considered good?
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>>1059104
25%
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>>1059105
At least.
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as much as possible
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>>1059113
So if you're NEET and save 90% of your "income" for 5 years you can retire?

S W E E T !
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>>1059115
if 10% of your income is enough to cover your living expenses during retirement, then yes
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>>1059105
>>1059106

of Gross or Net Income?
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>>1059104

Percentage by itself is not useful. You are thinking in dollars, right? There has to be an actual number of dollars as well.

Also consider that until you hit certain amounts--critical mass--so to speak, contributions will outpace performance, especially in retirement funds.
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>>1059113
What market return does this assume?
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>>1059113
I'm sorry, but what?

Is this implying that you can retire with 200,000k in savings?

Yeah, no.
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>>1059243
5% real rate of return while saving, 4% real rate of return during retirement

>>1059262
i don't know where you got $200,000 from as the only figures in the chart are percentages and years

that being said, if you can live off $8,000/year then $200,000 is a big enough retirement fund
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>>1059262
It's pretty simple really. You see, the chart is a test. If you can't figure it out, you're never going to fucking retire you poor dumb cunt.
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>>1059268
I was basing it on 80% of yearly income (after tax) being around $40,000. Which is significantly higher than avg american.

200,000k is NOT EVEN CLOSE to a comfortable retirement at the age of 60.... let alone 30.

>>1059274
I have 1.5m in investments, and im 27. I wouldn't be entirely comfortable retiring on that, even though i live a pretty modest life.
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>>1059278
if someone is earning $50,000 and saving $40,000 then they are living on $10,000

after 5-6 years of investing $40,000/year with a 5% real return each year they'll have ~$270,000

assuming they continue to get at least 4% real return each year they can withdraw 4% of ~$270,000 per year without reducing their real investment

4% of ~$270,000 is ~$10,000, which is what they were living on while they were saving

in reality most people can't live on 20% of their income, so the 80% savings scenario is simply impossible for them
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>>1059286
You say that like its easy...

Average inflation is over 3% in USA for the last century.

Sure, getting 7% returns on investments over the past 30 years was easy, but the economy is in the shitter now.

My heavily diversified investments are currently down 5% in the past 6 months.

Most people would struggle to get 1% real return each year.

>if someone is earning $50,000 and saving $40,000 then they are living on $10,000

You're going to have a pretty shitty life trying to live on 10k each year. Not to mention that in ~20 years, your expenses for the same things will be up to 20k due to inflation.
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>>1059293
Dude, that's why there was multiple percentages. The math adds up, IF someone were to do that, and get used to that standard of living, they could live off of that.

Not even the guy who posted that. Of course there are all sorts of variances, and it would make sense for them to go for a lower percentage.

But if someone was dead set on that 80% and could somehow get expenses down that far, fuck, go for it.
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>>1059297
Regardless of the 80%, im saying that having $270k is not enough to retire on. Safely getting 7% each year is not easy in this economy.
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>>1059293
i have a hard time believing you have $1.5m in investments given that you are finding this so difficult to comprehend

>You say that like its easy...
i can't be bothered explaining it to you

here's some charts to help you understand

>>1059301
you're dense

retire now and enjoy your $60,000/year
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>>1059301
I'm the guy you responded to.

Now this might be completely out of your realm of thinking, but honestly, there's a decent chance that if I had that much money I would go to Vietnam or somewhere like that and live out the rest of my days.

But to each his own. Do your thing I'm out, have a good one.
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>>1059306
Why do you think theres some kind of correlation between being successful and having a deep understanding of economics? There isn't.

All i'm saying is, that hitting 7% every year is not easy, and it's a bit naive to rely on something like that for the rest of your life.

What happens when you have a shitty year and have 10% real losses instead of 4% real gain?
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>>1059311
this does not require a deep understanding of economics, or really anything above basic addition, subtraction, percentages, and general knowledge about investments and rates of return

>What happens when you have a shitty year and have 10% real losses instead of 4% real gain?
that's accounted for in monte carlo simulations, the results of which i posted above

as you can see, in 84% of cases, an investment of $270,000 comprised of 50% stocks, 40% bonds and 10% cash will survive at least 50 years with the investor spending 3.7% ($10,000) yearly

now we've already covered how $10,000 is an unrealistic number, which is exactly why the original table used percentages

if i only make $50,000/year then it's highly unlikely that i can save 80% of that and live on the remaining 20%

if i make $200,000/year, though, i can save 80% of that, live on the remaining 20% and retire after 5.3 years of saving

it's the exact same saving:spending ratio, but whether it is or isn't possible depends on the income of the person pursuing it
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>>1059104
everything above the amount needed to spend on subsistence and investing in yourself
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>>1059311
You do not hit 7% a year. Best years 30 to 40%, worst years -20% to-30%, overall more good years than bad, and at the end of ten or fifteen years, the average profit per year is around 7%. That's why index funds are long term investments. Going with the rule of four (not taking out more than 4%/year, once the nest is constituted) allows you an average three percent margin even once you start living off of your interest, to make up for bad years.
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