12/14/2023 0 Comments The shockingly simple math![]() There are a lot of factors that go into achieving enough to retire, such as the rate of return, sequence of returns, your withdrawal rate, taxes, etc. ![]() Now, as with most things in life it’s not actually quite that simple. Not into early retirement? Don’t worry, it covers how much you need to save for many career lengths. Check out the Shockingly Simple Math Behind Early Retirement for details. That’s because if you limit lifestyle inflation, retirement can be funded with a smaller amount of money.īut just how much money do you need to retire? Luckily, one of the seminal pieces of work in the FIRE community answers exactly that question. I’ve talked before about how if you keep your expenses low, you don’t need as much money to retire. If you’re ready to increase your savings rate, join in! Savings Rate and Retirement At the end of the post, I’ve got a challenge for you. Why discuss this now? Because January 1st is rapidly approaching. Just simple steps that everybody…okay, most people…can take to improve their savings rate over time. They really don’t include any change at all, actually. These methods don’t include massive reductions in spending or job changes. So I’m going to use a detailed real-world example of how somebody with a pretty normal salary could do it. My salary is not the average American salary. It’s taken nearly ten years of incremental increases. To the FIRE community, it’s probably pretty average. To the “average American,” (I kinda hate that term, but it’s sometimes helpful) it’s probably really high. I’m going to teach you the method I used to create a high savings rate. Consider this a “How To Achieve A High Savings Rate Without A Total Life Overhaul” guide. For most of us, it’s going to take a bit longer than a few weeks or months, but it can be done. There is a way for people to incrementally increase their savings over time, though, even if they are starting at 0%. But something tells me that’s not typical of most people. If you are incredibly motivated and already have a lot of ridiculous spending in your budget and are a high earner, sure, maybe you can go from a 0% savings rate to 50% in 3 months. Have you ever seen one of those articles that talks about saving half your income, and they make it seem like it’s something you can just ease into in a few weeks? An article like this one? So here you go – a surprise Finance Friday post! You’re welcome.Īchieving A High Savings Rate – It’s Just That Easy! ![]() I think it actually works out, though, because this topic lends itself well to a Finance Friday. So unfortunately, I didn’t get this out on my normal schedule. There are so many ways to go when talking about savings rates! There are a lot of moving parts in my life right now! Holiday season, amiright? Plus, I kept adding more and more to it. I wanted to get this post about achieving a high savings rate out on Wednesday, but I had a lot going on both at work and at home. Amy gives a realistic timeline on how long it takes to get retirement on track.It’s been a long week. If you think you’re too old to turn your financial life around, skip to minute 59. ⭐️ Loan rehabilitation - how to get your student loans out of default ⭐️ FIRE - Financial Independence, Retire Early ⭐️ Using a Debt Avalanche to pay off debt A conversation with multidisciplinary designer Amy D Lux about how she got on track to become financially independent.
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