new user
My wife and I got our first real jobs and we make ~ 430 K. Last year we did not save almost anything because we had student loans to pay off, house downpayment, renovation of the house and few other major expenses. Now all of that is behind us. In the next several years I think we can easily save > 100K and invest in stocks or whatever. It appears to me that ESP thinks that because we have minimal savings at this time that we will be spending 430K a year and is trying to calculate our expenses as such. How do I compensate for that? Am I missing something? Should I treat 100K a year as a reserve fund? :?:
RSS
dklisovic at gmail.com wrote:My wife and I got our first real jobs and we make ~ 430 K. Last year we did not save almost anything because we had student loans to pay off, house downpayment, renovation of the house and few other major expenses. Now all of that is behind us. In the next several years I think we can easily save > 100K and invest in stocks or whatever. It appears to me that ESP thinks that because we have minimal savings at this time that we will be spending 430K a year and is trying to calculate our expenses as such. How do I compensate for that? Am I missing something? Should I treat 100K a year as a reserve fund? :?:
Keep in mind ESplanner is trying to determine your standard of living over your lifetime. Also, recognize that the definition of consumption accounts for your housing/mortgage(s), etc. The program is trying to determine that sweet spot. Do you think the recommendation is high or low? Not really clear from your post.
I wanted to offer my take on this too.
ESPlanner is showing you the highest sustainable living standard given everything you tell it. You can see the bottom line by looking at the Annual Recommendations sheet and note the Consumption column or the Per adult living standard column (they are two ways of looking at the same thing).
If you are not "borrowing constrained" you'll see that this number is the same all the way down the column. If you are borrowing constrained, the number will get bigger later in life.
Here are some ideas for you to experiment with.
1. Add some money to a ROTH IRA in the retirement panel.
2. Add some money to the individual retirement account if that's something you want to do.
3. Enter some special expenses for a future year
4. Read the illustration sheets in the "Uses" folder on the main website and get some ideas there.
Best,
Dan