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Show HN: Investment Calculator – A simple retirement calculator

investmentcalculator.io

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Re: Show HN: Investment Calculator – A simple retirement calculator

#191

Post by astura »

cure wrote: post #141

From the FAQ: What is my retirements purchasing power today? Inflation is inevitable. If that word is new to you, it simply determines how much purchasing power your dollar has. Historically, inflation has always increased with time. In order to get a good understanding of the purchasing power of your future retirement savings for today, you can do a “simple” calculation: Take your total retirement savings and multip…

Its just not bad math, it's also bad history.

It actually says that the rate of inflation always increases with time, which is... not true! Even if it's trying to say, clumsily, that there has been inflation every year historically... that's also not true. There has been periods of deflation, historically

https://en.wikipedia.org/wiki/Deflation#Historical_examples

Re: Show HN: Investment Calculator – A simple retirement calculator

#192

Post by astura »

CompelTechnic wrote: post #112
chrisan wrote: post #90

Earlier quoted context omitted.

Is there anything on how to figure out what your retirement goal should be? Like how am I supposed to estimate costs I will need in retirement to know how much I need to start with.

A good guesstimate: 1. Figure out your current lifestyle expenses (you can track this over time if you use mint.com or other websites) 2. Subtract your mortgage if you plan to have it paid off by retirement 3. Add in fudge factors for healthcare expenses and increased or decreased discretionary expenses, depending on the lifestyle you think you will live As with any planning, you can stare at the numbers forever and…

Your lifestyle/spending in your 20s and 30s has little to do with your retirement lifestyle/spending. Especially if you're rasing children...

Re: Show HN: Investment Calculator – A simple retirement calculator

#193

Post by leetcrew »

WalterGR wrote: post #127
WalterGR wrote: post #10

Does this assume that I'll live forever, or that I'll die some day?

Ah, it does not assume that you'll die: The retirement calculator takes the Total retirement savings and calculates how much monthly income a 4% annuity would generate without drawing from the principal. This indicates the type of lifestyle you can expect without running out of money. Or, to put it another way: it assumes that you want to be worth roughly the same at death as you were at retirement. That's fine, but…

> If you aim to break even at death, that changes the calculations.

do many people do this? seems unwise given the uncertainty in our lifetimes.

Re: Show HN: Investment Calculator – A simple retirement calculator

#194

Post by astura »

Veelox wrote: post #82
mcovey wrote: post #16

All this does is scare me. I honestly hope I die before I have to retire, because there's no way I'm going to have saved enough money to live off of, even modestly, and no way I'm going to remain sharp enough to continue earning through and beyond my 60s.

> there's no way I'm going to have saved enough money to live off of It is possible. It will take work and change on your part. The first step is to track your spending. The easiest way to do this is get an account with mint, ynab (you need a budget), or personal capital. You can link all of your accounts with the site and app. You can then categorized your spending. After you do this you can start seeing where you c…

The Millionaire Next Door is not a great book - it's just survivorship bias and assumes correlation is causation.

http://www.latimes.com/business/hiltzik/la-fi-mh-the-death-o...

Plus one of the authors died driving a Corvette, not a Corolla...

Like all self help books, it's about selling hope.

Furthermore, you were entirely unwarranted in making the assumption that the GP has a spending problem instead of an income problem.

Re: Show HN: Investment Calculator – A simple retirement calculator

#195

Post by Spooky23 »

ryandrake wrote: post #73
teej wrote: post #54

Earlier quoted context omitted.

Yeah, it's also using a 9% rate of return for the "conservative" scenario and 12% for aggressive. Due to the exponential nature of compound interest, just a single point of overoptimism in your real growth number leads to a massive overestimation of your results. 1.07 ^ 30 = 7.6, 1.09 ^ 30 = 13.3, and 1.12 ^ 30 = 30.0 It's baseline assumptions are way off.

Yowzers! Please tell me what this magical investment is where I can expect an average rate of return of 9% (let alone 12%). That is off the charts optimistic.

If you followed basic financial advice since the 80s you'd achieve those retirns.

Re: Show HN: Investment Calculator – A simple retirement calculator

#196

Post by Spooky23 »

teej wrote: post #132
jonknee wrote: post #120

Earlier quoted context omitted.

To be fair the total annualized return of the S&P 500 over long periods is roughly 10%. You don't have to reliably beat the market to reach those numbers. It's interesting to play around with: https://dqydj.com/sp-500-return-calculator/

I think you forgot to click the “inflation adjusted” checkbox. The real rate of return is closer to ~7%. Also caveat emptor - past performance is no guarantee of future results.

Says who?

Projecting historically low inflation is no less reckless than ignoring it. Imo, you're better off looking at absolute returns and tweaking your expectations based in inflation as itnhaopens.

Re: Show HN: Investment Calculator – A simple retirement calculator

#197

Post by astura »

andrewmcwatters wrote: post #148

what's pisses me off about these calculators is they completely ignore deduction limits[-1] and considering the audience here, there's plenty of people who do not benefit at all from contributing to an ira, or even a 401(k) if you plan on retiring earlier than 65 in fact, it's detrimental, compared to the fund flexibility of a standard brokerage i wish people would talk about this more; perhaps there's something i'm…

Use can use the Roth conversion ladder to access retirement funds early.

https://www.moneyunder30.com/roth-ira-conversion-ladder

You can use a Backdoor Roth to get around income limits.

https://www.rothira.com/what-is-a-backdoor-roth-ira

Anyways, this "caluculator" didn't mention anything about taxable accounts vs tax advantage accounts.

Re: Show HN: Investment Calculator – A simple retirement calculator

#199

Post by internetman55 »

dclowd9901 wrote: post #72
teej wrote: post #54

Earlier quoted context omitted.

Yeah, it's also using a 9% rate of return for the "conservative" scenario and 12% for aggressive. Due to the exponential nature of compound interest, just a single point of overoptimism in your real growth number leads to a massive overestimation of your results. 1.07 ^ 30 = 7.6, 1.09 ^ 30 = 13.3, and 1.12 ^ 30 = 30.0 It's baseline assumptions are way off.

There's also issues with the suggestions. It suggests driving for Lyft or Uber for a cool $28k more a year, but the article linked doesn't seem to account for costs of that work, just revenue.

Is that actually a suggestion? If you make an upper middle class salary (like a programmer does) and reasonably control your expenses, I think you only are going to miss making retirement if you have an expensive medical disaster or you invest too heavily in the market then sell during a crash to make rent, or some weird thing like that. I'm not sure if $20000 is going to make your difference

Re: Show HN: Investment Calculator – A simple retirement calculator

#200

Post by jbdubwub »

poulsbohemian wrote: post #180
ryandrake wrote: post #96

Earlier quoted context omitted.

There is no straightforward risk-less formula, unfortunately. You can follow all the textbook advice, have a budget, max your 401k, pay down your debt, buy a house, blah blah blah, and after 20 years still only have 1x or 1.5x your salary in total savings [ask me how I know] due to bad luck, unfortunate market timing, lack of skill in investing, emergencies, etc. I hate all this simplified, incomplete advice. If succ…

Amen! I read The Millionaire Next Door when I was 22. Bought a house in a low-cost but appreciating neighborhood. Started working with an accredited financial advisor. Saved double-digit percentages of my income. Worked hard, made a six-figure income. At forty? Here I am tens of thousands in debt, all that hard work gone. I did all the things society told me to do if I wanted to live the good life, but life can come…

What happened? I'm always interested in the stories where things didn't work. People don't hear those.
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