Chart calculation is a bit wrong.
If your savings is at 0, then it gives you 0 as a return on your first year investments. In reality, the return would be 1/2 of the normal return since you usually don't wait until years end to invest the money, but instead buy your 401k(or others) every month usually.
Thanks! You are right. I really appreciate you letting me know.
I fixed this. I’d love it if you reviewed my changes.
I do the calculations for the graph and the table with completely separate code. So the values in the graph are unchanged and should still be correct. Its only the values in the table that have changed.
When reviewing the values in the table keep in mind the effect of the withdrawal rate on when you can retire. I need to do something to make this more clear to users but I’m not yet sure what.
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Adminkablamo (Admin, Networthify) commented
Hi Jeff! The withdrawal rate is a bit counter intuitive in nature and that trips up a lot of people.
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.
For example, if your expenses are $30K then:
at 4% withdrawal rate you need a nest egg of $750K
at 3% withdrawal rate you need a nest egg of $1MRemember the calculator assumes your expenses in retirement are the same as your expenses now.
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Jeff commented
Withdrawal rate appears to be broken, though it isn't clear what it means when the assumptions are unhidden.
The default calculation says "You can retire in 12.4 years".
When "Withdrawal rate" is reduced from 4% to 3%, it says "15.3 years".
When "Withdrawal rate" is increased to 100%, it says "0.7 years".Shouldn't withdrawal rate decrease the time to retire?
And only kick in when one becomes retired?[Also a minor suggestion: to never hide the assumptions since there aren't many bullets]