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12 June 2007
Retire early? I've been looking at this and the calculations on this too have to be way, way off. Does she account for inflation in the expenses? I don't know how to tell. Anyhow, it's a neat little calculator.
One big problem there is taxes. she could've included the income tax table on the calculations.
Also, no inflation there. You can just subtract it (I don't know US inflation... 2%/year?) from the expected interest. Also, remember your money will be (or should be) in low risk investments while you're retired, so don't just fill in whatever you earn on your ultra-risky 401k plan now.
I'd say put 1.33 times what you expect to spend in expenses (to account for taxes), and about 3% on APR, and you have a realistic number.
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