veremchuka
Thinks s/he gets paid by the post
I was reading the paper and the TV was on FNC when DR came on. I started to hear what sounded like outrageous comments (gee from Dave, really? ) so when I was done reading the paper I went back and took notes, the DVR automatically records 1 hour of the channel you are on.
The discussion was about not saving enough for retirement. So this is what DR said -
Take an average 30 year old making $48,000 per year and if he saves 15% per year which is $7,200 from age 30 to 70 he will have $7.4M in a Roth IRA.
That is exactly what he said!
Now I question whether a 30 year old would be able to save that much from that level salary. There was no mention of salary increases therefore we are talking about $7,200 X 40 years = a measly $288,000 saved. Now I know all about the wonder of compounding but genius Dave never mentioned a return rate, how convenient. I guess he thinks you'll earn what 12% or 18% every year for 40 years? But wait, the Roth IRA contribution limits for 2012 are $5,000 if you're under age 50 and $6,000 if you're over age 50. So the 30 year old comes up short $2,200 a year for 20 years and then is short $1,200 for the next 20 years but that's just details I guess. But here's what really caught my attention, at age 70 your safe withdrawal rate from the Roth is 8%.
Amazing isn't it? How did we all manage to FIRE without Dave's help and do it in our late 40's or 50's or early 60's, that's what I want to know.
The discussion was about not saving enough for retirement. So this is what DR said -
Take an average 30 year old making $48,000 per year and if he saves 15% per year which is $7,200 from age 30 to 70 he will have $7.4M in a Roth IRA.
That is exactly what he said!
Now I question whether a 30 year old would be able to save that much from that level salary. There was no mention of salary increases therefore we are talking about $7,200 X 40 years = a measly $288,000 saved. Now I know all about the wonder of compounding but genius Dave never mentioned a return rate, how convenient. I guess he thinks you'll earn what 12% or 18% every year for 40 years? But wait, the Roth IRA contribution limits for 2012 are $5,000 if you're under age 50 and $6,000 if you're over age 50. So the 30 year old comes up short $2,200 a year for 20 years and then is short $1,200 for the next 20 years but that's just details I guess. But here's what really caught my attention, at age 70 your safe withdrawal rate from the Roth is 8%.
Amazing isn't it? How did we all manage to FIRE without Dave's help and do it in our late 40's or 50's or early 60's, that's what I want to know.