# Is saving for retirement a good idea? **URL:** \ **Category:** Great Debates\ **Created:** [August 15, 2010, 4:30pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335 "2010-08-15T16:30:56Z")\ **Posts on this page:** 1\ **Showing post:** 52
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [August 17, 2010, 1:59am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/52 "2010-08-17T01:59:06Z")
> [@Leaper](#): > > I created a related thread [here.](http://boards.straightdope.com/sdmb/showthread.php?t=574764) Leaper, I’m going to respond to your question from the other thread - but here since it seems to fit better. You asked: > [@Age discrimination in employment - serious? Continuing issue?](https://boards.straightdope.com/t/age-discrimination-in-employment-serious-continuing-issue/550429/5): > > I should add that one of the reasons this got me thinking is that I read somewhere that you can’t retire on less than a million bucks or so. Given that most people start working at around age 21 or so, so if this sentiment is true, you have less than 20-30 years to make a million dollars plus. I can’t see how this leaves much, if any, margin for error. If you lose more than, say, two or three years to a bad economy, bad decisions, or what have you, are you completely screwed? You probably won’t be screwed, but getting into investment strategies is not for this thread (at least not for me). Let me say that I have ridden investments up and down twice this decade and have seen them come back. Friends who pulled out in a panic are not so happy. If you start early, time is on your side. There are really two things to be concerned with - saving and investing to get your required nest egg - making sure that it lasts for your entire lifespan For the first, you have to start saving and investing - lots of web sites to help with that. For me, the eye opener and incentive to invest for retirement was when someone pointed out that if you save a given amount yearly for ten years from 20-30 and let it ride or save the same yearly amount for thirty years from 35-65 - the magic of compound interest leaves you with about the same amount at 65. For the second, you need to determine if the money will last. Hakuna Matata might join in here, but a good site for both is the [Early Retirement](http://early-retirement.org/forums/) forum. To help answer the ‘will it last’ question, it also has FireCalc, a ‘Monte Carlo’ caculator that will run 100 or more history based simulations of the economy and tell you how many times you would have run out of money. Investment advisors charge big bucks for that sort of analysis. Regarding the ‘magic million’ Nest Egg, it might be good if you are retiring this year, but if you are 20 years out it is not a good number. A very crude way to calculate it is _Nest Egg = (Desired income - Social Security) \* 25_. Then at retirement, each year, you spend 4% of your nest egg. If you want to retire this year at the US median income of 50K and will have 20K in SS - then you’ll need 750K set aside. If you are going to retire in 20 years, then you’ll need to adjust for inflation - living on 30K + SS now might take 50K + SS in 2030 - which means you’ll need the magic million. (These are very simple examples, the web abounds with more sophisticated tools like [FireCalc](http://firecalc.com/).) --- _[View the full topic](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335)._