Hi,
I'm getting milestone envy.
When you were 31 - how big was your retirement stash? When did you start?
I'm 31 and at about $60k and all the calcs say i will be ok if i keep throwing in the $ as well as save more after tax...but just want some verification it can be done!
Not sure exactly, I am 34 yo, and have 140k in my accounts, plus 20k in wife's accounts at present time. All signs suggest retirement at age 60 is a forgone conclusion (with 2 M account value). This assumes we contribute nothing from this point forward.
Adding to the accounts increases probability of FIRE.
Current goal is 360k by age 39 (5 years to get there). 360k by age 39 suggest we reach the 2 M goal at age 52, not age 60.
I have a spreadsheet which I use to track milestones. Uses rule of 72 and goes like this
list age you want to retire in one column. List amount needed next to it in adjacent column. Using rule of 72, divide return rate into 72 (8% return=9, 10% return =7.2 etc...)
in cell below age, subtract age by number above, and divide the goal in half. in next row repeat. in next row repeat.
might look like this:
age 60 goal $2,000,000
age 52 goal $1,000,000
age 44 goal $500,000
age 36 goal $250,000
age 28 goal $125,000
this is assuming a 9% return (money doubles every 8 years)
you could also reverse the chart
age 31 amount 60k
age 38 amount 120k
age 45 amount 240k
age 52 amount 480k
age 59 amount 960k
age 66 amount 1,920k
this assumes a 10% return (money doubles every 7 years)
These charts serves 3 purposes
1) shows me when compounding will give me money needed
2) shows me if current actions are in line with goals- allocation wise-meaning make sure I have an allocation which can reach the goal.
3) shows me if return can be ratched downward and allocation adjusted to more conservative position
You could also set the goal of 240k invested by age 38, which suggests you reach 1.920 M goal at age 59 (7 years sooner).
On the chart I reference, I have columns for 7%, 8%, 9%, 10%, 11% and 12% returns. The retirement age is the same, the difference is seeing which age ranges I need a 9-11% return, and when I can ramp allocation down to something resembling a 7% return.
.
