

Show HN: When can you retire? An early retirement calculator - kablamo
http://networthify.com/earlyretirement/

======
dheller
I think this is an interesting tool, and it's very easy to use. I had a couple
of thoughts:

1)What does the withdrawal rate measure? I took it to mean the % of your
portfolio value needed to cover your annual expenses after retirement. Might
be worth clarifying this somewhere.

2) Would be cool to see a similar chart for annual rate of return (if for
nothing more than to drive home the importance of savings rate).

Either way, I think it does a great job of highlighting just how big an impact
little changes can have.

~~~
kablamo
Thanks! I like the idea of a chart for annual rates of return.

The withdrawal rate is a little tricky. The withdrawal rate is the percentage
of your retirement nest egg you will be spending each year. If you decrease
your withdrawal rate you will need to save a bigger lump sum to compensate for
the smaller amount of income you are generating. Therefore it will take longer
for you to retire.

~~~
danielhughes
It would be helpful to see at what age you will run out of money for a given
withdrawal rate. Without that it's difficult to know what rate of withdrawal
to enter.

~~~
kablamo
The calculator assumes you never want to draw down your nest egg -- ie your
savings will only grow larger. It also assumes you will spend the same amount
in retirement that you spend now. Your rate of withdrawal is pretty much a
wild guess as it depends on your rate of return, taxes in the future and
inflation in the future. Historically 4% has been a good bet. See this article
for a summary of this topic:

[http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-
need...](http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-
retirement/)

and this article for more in depth writing:

[http://financialmentor.com/free-articles/retirement-
planning...](http://financialmentor.com/free-articles/retirement-planning/how-
much-to-retire/are-safe-withdrawal-rates-really-safe)

------
camz
Let me know if you want help with anything related to the finance and tax
calculations. One thing I'd mention is that these calculators are fairly
common, but the problem is that most people dont understand them. Putting them
into context would probably much more useful. I'm a CPA, JD by trade so I have
a good amount of experience in this.

------
kablamo
I'd love to hear any ideas/reviews. I was inspired to create this calculator
after reading this Mr Money Mustache article:

[http://www.mrmoneymustache.com/2012/01/13/the-shockingly-
sim...](http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-
behind-early-retirement/)

If you are interested in the math behind the calculator see my blog post about
it here:

[http://blog.networthify.com/math/the-math-behind-the-
calcula...](http://blog.networthify.com/math/the-math-behind-the-calculator/)

~~~
rogerbinns
I'd like to see a way of incorporating real life variances in there. For
example the probability of getting the same inflation adjusted salary for the
remaining time is zero. Many are likely to experience periods of unemployment
or temporary higher expenses. Similarly the markets don't give such a
predictable return. Throw in a business cycle and the numbers are far less
certain.

