I’m reading an article about retirement savings, and I click on a link that will let me fill in a web form and tell me how much I should be saving. I click the link (provided here for your enjoyment) and I start to fill it out.
And then (insert screeching record-player needle scrape), I get to “4. Enter the desired replacement rate:”
My bachelor’s degree was in Computers, through the college of business. I’ve taken accounting and finance classes. I’ve been on the board of a startup company. I am familiar with and reasonably comfortable with ROI, IRR, Net and gross margin, EBDITA, cash flow and balance sheets and plenty more. I’m no financial wizard, but I’m not a novice.
I have never heard the term “replacement rate”. Moreover, I can’t figure out what “replacement rate” would mean in this context. Is it the amount I want to take out each year? Is it the expected interest rate on my money? Is it something else?
And of course, there’s no description of what it might mean. Nooo! That would be too user-friendly. They have plenty of descriptions for later fields, like rate of return and pensions. But “desired replacement rate” is apparently much too obvious to justify explanation.
And yes, I could go look it up via google. But as a user, I shouldn’t have to.