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The 33/33/33 rule aims to provide you with enough savings to cover your current cost of living in retirement. It's based on the assumption that your cost of liv
by ecdavis 11y ago
The 33/33/33 rule aims to provide you with enough savings to cover your current cost of living in retirement. It's based on the assumption that your cost of living won't drastically change in the meantime. That assumption breaks down when you're living in a very high cost of living area where you don't intend to retire. I doubt that very many people who live in 1BR apartments in downtown SF will maintain that lifestyle into retirement.
- davidw 11y agoRealistically, they won't maintain that lifestyle once they have kids. One of the reasons I got out is that it was too weird living in a place with tons of 20-somethings (I was one too, at the time) and not a lot of everyone else.
- dkns 11y agoFor those who don't know 33/33/33 rule is it rent/expenses/savings?
- ecdavis 11y agoI think it started as expenses/spending/saving but has now become rent/other expenses+spending/savings. Recently I've seen other "rules" emerge which are far heavier on the expenses. Fidelity, for instance, suggests a 50/15/5 split between expenses/retirement savings/short term savings. I think having such high expenses is pretty risky, myself.