2491: Silly and Misleading Retirement Calculators by Mr Money Mustache on Percentage of Income Formulas

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🗓️ 22 October 2023

⏱️ 9 minutes

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Summary

Mr. Money Mustache talks about silly and misleading retirement calculators. Episode 2491: Silly and Misleading Retirement Calculators by Mr Money Mustache on Percentage of Income Formulas Mr. Money Mustache is a thirty-something retiree who now writes about how we can all live a frugal, yet awesome, life of leisure. He and his wife studied engineering and computer science in Canada, then worked in standard tech-industry cubicle jobs in various locations throughout the late ’90s and early 2000s. Then they retired from real work way back in 2005 in order to start a family. This was achieved not through luck or amazing skill, but simply by living a lifestyle about 50% less expensive than most of their peers and investing the surplus in very boring conservative Vanguard index funds and a rental house or two. The original post is located here: https://www.mrmoneymustache.com/2011/04/21/silly-and-misleading-retirement-calculators/ Visit Me Online at OLDPodcast.com Interested in advertising on the show? https://www.advertisecast.com/OptimalFinanceDaily Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Optimal Finance Daily Episode 2491, silly and misleading retirement calculators
0:07.2	by Mr. Money Mustache of Mr. Money Mustache.com and I'm your host and personal finance enthusiast,
0:13.4	Diana Mariam.
0:14.9	Now let's get right to today's post and start optimizing your life.
0:23.1	silly and misleading retirement calculators by Mr. Money Mustache of Mr. Money Mustache.com.
0:30.5	I think the main reason people seem amazed at the idea of retiring at age 30, 40, or
0:35.9	even 50 is the lack of real information on early retirement in general.
0:41.7	If you type retirement calculator into a search engine these days and enter some basic stats
0:47.1	about yourself, you will find some very strange assumptions that are guiding you to think
0:51.7	you need an absolute load of money to retire.
0:55.6	For example, I was once working through such a guide in a magazine from Northern Trust,
1:00.5	a bank that caters to the wealthy.
1:02.8	It went something like this.
1:05.3	Consider your goals for retirement.
1:07.5	What life events do you need to be prepared for?
1:10.5	The following table lists average costs.
1:14.3	Children's and grandchildren's university education, $100,000 per child.
1:20.6	Funds and grandchildren's weddings, $25,000.
1:25.1	Assisted care facilities, $100,000 per year, medical costs, funeral arrangements, $25,000.
1:33.1	Trust funds for loved ones, estate and legacy planning, and charitable foundations.
1:38.7	Wow, looks like you're well into the millions before you even get to buy yourself some groceries.
1:45.7	Another retirement calculator on CNN.com has various parts to fill out drop-down boxes
	...

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