this post was submitted on 21 Nov 2023
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We don’t get to retire
Compounding interest is a hell of a drug.
Saving anything is infinitely better than saving nothing.
Retiring is possible for anyone with an education, but it is a sacrifice, and a gamble on not dying
Anyone can save for retirement, even without a formal education. It just time and diligence to save, and then some reading to learn how to invest.
All of that requires a livable wage first. How many times do people have to prove that no amount of "dilligence" will allow people to live, let alone save on minimum wage in most places?
It's just having the self-control to live below your means.
Try playing with this. Set the interest rate to 7%. Assume you will live to 75 (average us life expectancy) and retire at 65.
Now change the monthly contribution amount to the most you can comfortably contribute right now if you opened an IRA IRA.
This is your low estimate of your retirement savings. As you get older hopefully you earn more and can contribute more.
Just curious how you came up with 7%? I was always taught to expect the yearly return to be 4%
My number I picked after reading about historical averages.
https://awealthofcommonsense.com/2021/05/200-years-of-asset-class-returns/
4% stays ahead of normal inflation, 7% matches greedflation.
I found this even more helpful.