Any rules of thumb based on salary are garbage. Base it on your annual expenses

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Feb 26, 2021
1:57:55pm

Baron AKA "Dear Leader"

Any rules of thumb based on salary are garbage. Base it on your annual expenses

and estimated annual expenses.

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Baron

Previous username: jarocho
Bio page: Baron
Joined: Sep 1, 2006
Last login: May 7, 2024
Total posts: 94,311 (32,804 FO)

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Messages

Author

Time

Saving for Retirement...how much should you have saved by specific age groups

doctorcoug

2/26/21 1:50pm

The more I’ve looked into the age related recommendations the more I’ve realized they don’t apply to physicians

Slim

2/26/21 1:51pm

None of my clients, even with twice that amount, only live off the interest.

dratax

2/26/21 1:53pm

They could easily live off the interest comfortably of the wanted to.

Jdoc

2/26/21 1:56pm

What interest rate do you think banks pay on $4m?

hamaca

2/26/21 2:05pm

I think when he says interest, he really means interest + capital gains +

Pickett

2/26/21 2:09pm

I assume it’s invested in a mix of stocks and bonds with at least a 5-8%

Jdoc

2/26/21 2:23pm

Interest was specifically mentioned, not dividends or capital gains

dratax

2/26/21 2:41pm

I understand low risk tolerance for people with more normal amounts of

benny1982

2/26/21 2:59pm

Interesting Explain why not what is the biggest expenses that tap in principle

germ1

2/26/21 2:15pm

You have some extravagant clients or don't manage money well.

Lance71

2/26/21 2:26pm

They have to fund his retirement. That advice doesn't come cheap.

Baron

2/26/21 2:27pm

It ain't cheap to manage those assets (and put you in actively managed funds with front end load fees mind you).

2/26/21 3:16pm

It's less dependent on salary and much more dependent on expenses.

Broda

2/26/21 1:54pm

But there is a reason they use salary.

Eddie

2/26/21 2:04pm

Salary is horrible indicator for someone who has a very high savings rate (30%+).

2/26/21 2:27pm

Yup. It is.

Eddie

2/26/21 2:31pm

I get where you are coming from and I don't really have an answer for the general population.

2/26/21 2:33pm

Any rules of thumb based on salary are garbage. Base it on your annual expenses

Baron

2/26/21 1:57pm

Hack!

Baron

2/26/21 1:58pm

I spend so much money on my kids, it is really hard to judge what is going to

doctorcoug

2/26/21 2:01pm

It is but you can figure it out. Lots of data out there.

Baron

2/26/21 2:05pm

Regarding spending more in early retirement than later, I had a set of

2/26/21 2:33pm

Yes there are outliers but for most that is not true. Vanguard had a great

Baron

2/26/21 2:36pm

Here is some actual data on healthcare costs:

Baron

2/26/21 2:41pm

I can verify that this is true. My HSA is being invested currently as my future

doctorcoug

2/26/21 2:38pm

There is long term care facility insurance.

Lance71

2/26/21 2:39pm

The amount multiplier by income is done that way due to a belief...

Eddie

2/26/21 2:01pm

I'm techinically retired, but my spending is a fraction of what it was before.

Nat Gas Man

2/26/21 2:29pm

Much different to have $100K saved as a 40 yo doctor vs. as a 40 yo HS teacher.

2/26/21 2:06pm

Not if the doctor lives like the teacher.

Baron

2/26/21 2:08pm

The point is, maybe the doctor just finished paying off student loans, and now

2/26/21 2:10pm

I remember early on watching my 401K grow. When I hit $100K in the account, it

doctorcoug

2/26/21 2:29pm

Compounding interest is your friend.

Eddie

2/26/21 2:33pm

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