Friday, February 09, 2007

I Disagree With Fidelity

Retirement planning is a tricky business, and I guess when it comes right down to it, I should trust the experts. But when I do these online retirement planners and calculators, I cannot help but feel annoyed. The latest one I tried out was a basic one on the fidelity website and according to them, I will have somewhere between 700k and 1.5 million when I retire, even though I need about 2.5 million (according to them). But the flaw with most calculators, this one included, is that you don't understand enough of how they got to their conclusions.

The scary part for me is that I have done some basic calculations and I have found that I will more than handle the amount of money that will be needed. My conservative calculations put my likely retirement somewhere around 1.7 million for just my 401k and then 150K for my roth. And all of this is not including real-estate or potential social security. And all of these are conservative calculations where I only intend to increase my contributions at the rate of inflation/raises and also only consider about 8% gain. My real goals of contribution/savings/investment return are actually much loftier.

Is anyone else in the same boat when they use these calculators or is it just me?

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