Ten for Tuesday, September 28, 2010

This is the final Ten for Tuesday for the month of September. Hard to believe we are nearly 3/4ths of the way through the year.

1. First off, Moolanomy is hosting a giveaway. The winner of the giveaway will get a $150 gift card. That’s a nice giveaway!

2. The Unintentional Housewife’s Budget Tip #3: Use Cash

3. Don’t let life get you down. Instead, Swing Away

4. Budgets Are Sexy has 5 things he feels kinda bad about.

5. Jonathan take a look at a variable annuity fee breakdown.

6. Jill has 5 steps to building and keeping good credit.

7. FMF: This couple is killing me.

8. Larry Swedroe likes The Coffeehouse Investor. So do I.

9. Are you broke? Try budgeting.

10. Finally, Emily writes about the important role that the employer match plays in retirement planning.

2 thoughts on “Ten for Tuesday, September 28, 2010”

  1. In the last item, it is suggested that one needs to save about 15% of one’s income to be able to reach the “85% of final salary” goal.

    Well, that depends on your assumptions.

    Taking the data from Robert Shiller (http://www.econ.yale.edu/~shiller/data.htm) for the S&P500 and its predecessors, and assuming that bonds yield 7% per year, I ran a few simulations. Using the current salary distribution, and scaling for inflation over time, saving 15% of income — 20% in bonds and 80% in stocks, with rebalancing — the 85% goal was met 15% of the time. (This also assumes taking out 4% each year in retirement. If that is increased to 5%, the number goes to 29%.)

    These tests were for a worker starting at age 18 and working until 65. Obviously, not starting until 22 (after college) will make things worse, but one has more income to work with.

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