Author Topic: A good simple retirement calc to see how I'm doing?  (Read 3976 times)

Jules13

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A good simple retirement calc to see how I'm doing?
« on: July 05, 2014, 03:49:43 PM »
I have decided I want to start traveling more and not be so strict with our savings/spending but also want to make sure I'm doing okay to either retire "on time" or maybe a little early, but do more now and along the way.

We are 42 years old.  We have around $256,000 currently in retirement and save $2,357/month in retirement accounts.  We have room to increase the monthly contribution to about 2,787 since we are not currently maxing out our Roth accounts, but  can't do that right away with our current income/expenses. 

We'd like to have about 50k/year in retirement income, so figure we need about 1,250,000 in retirement savings for that.

Are we on the right track?  Is there a good calculator to figure this and keep checking?  I don't want a fancy one with tons to input.  Just something simple that will remind me we are on the right track. 

Thanks.

shuffler

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Re: A good simple retirement calc to see how I'm doing?
« Reply #1 on: July 05, 2014, 04:31:24 PM »
The best calculator is a spreadsheet.

IMO, you're not on track.

Assuming:
  • You'll do the larger of the two contributions you mentioned.
  • Your contribution stays constant in terms of real-dollars (i.e. it grows each year by the same amount as inflation)
  • You are 100% invested in equities and you achieve a 5% real-growth (i.e. 5% beyond inflation).
  • You retire in 20 years at 62 years old.

Given all that, the simple bit of math is just:
    EOY = 1.05 * BOY + Contribution

I found:

       BOY        Contrib. EOY (5% real growth)
2014   $256,000   $2,787   $271,587
2015   $271,587   $2,787   $290,669
2016   $290,669   $2,787   $310,896
2017   $310,896   $2,787   $332,337
2018   $332,337   $2,787   $355,064
2019   $355,064   $2,787   $379,155
2020   $379,155   $2,787   $404,692
2021   $404,692   $2,787   $431,760
2022   $431,760   $2,787   $460,453
2023   $460,453   $2,787   $490,867
2024   $490,867   $2,787   $523,106
2025   $523,106   $2,787   $557,279
2026   $557,279   $2,787   $593,503
2027   $593,503   $2,787   $631,900
2028   $631,900   $2,787   $672,601
2029   $672,601   $2,787   $715,744
2030   $715,744   $2,787   $761,476
2031   $761,476   $2,787   $809,951
2032   $809,951   $2,787   $861,335
2033   $861,335   $2,787   $915,803
2034   $915,803   $2,787   $973,538


... so you're not achieving the $1.25MM that you set as a goal.
« Last Edit: July 05, 2014, 04:39:54 PM by shuffler »

rpr

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Re: A good simple retirement calc to see how I'm doing?
« Reply #2 on: July 05, 2014, 04:38:49 PM »
Shuffler-- it is $2787/ month.

arebelspy

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Re: A good simple retirement calc to see how I'm doing?
« Reply #3 on: July 05, 2014, 04:42:50 PM »
http://networthify.com/calculator/earlyretirement

This will tell you your time to FI based on your current savings, SWR, and current income/expenses.  If you want to being that time in, you need to increase your income, decrease your expenses, or up your SWR (risky).
« Last Edit: July 05, 2014, 04:45:30 PM by arebelspy »
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

shuffler

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Re: A good simple retirement calc to see how I'm doing?
« Reply #4 on: July 05, 2014, 04:44:00 PM »
Shuffler-- it is $2787/ month.
Doh!  My bad.

And that totally changes the results, of course.

           BOY           Contrib.    EOY (5% real growth)
2014   $256,000   $33,444   $302,244
2015   $302,244   $33,444   $353,823
2016   $353,823   $33,444   $408,496
2017   $408,496   $33,444   $466,450
2018   $466,450   $33,444   $527,881
2019   $527,881   $33,444   $592,998
2020   $592,998   $33,444   $662,021
2021   $662,021   $33,444   $735,187
2022   $735,187   $33,444   $812,742
2023   $812,742   $33,444   $894,950
2024   $894,950   $33,444   $982,091
2025   $982,091   $33,444   $1,074,461
2026   $1,074,461   $33,444   $1,172,373
2027   $1,172,373   $33,444   $1,276,159
2028   $1,276,159   $33,444   $1,386,173
2029   $1,386,173   $33,444   $1,502,787
2030   $1,502,787   $33,444   $1,626,398
2031   $1,626,398   $33,444   $1,757,426
2032   $1,757,426   $33,444   $1,896,316
2033   $1,896,316   $33,444   $2,043,538
2034   $2,043,538   $33,444   $2,199,595

Things look much better now.
You may want to make this estimate more conservative by reducing the growth-rate, or figuring some portion of your stash is in stocks/bonds, etc.

Jules13

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Re: A good simple retirement calc to see how I'm doing?
« Reply #5 on: July 05, 2014, 06:16:46 PM »
Thanks Shuffler.  I like that spreadsheet math.  Our monthly contribution is actually currently $2357, but we can go as high as $2787 eventually since we aren't maxing our our Roth at the moment.  But, we'd have to increase our income to manage that at this point, so...

Thanks for the link arebelspy.  What is SWR?  We've reduced our expenses as far as we are willing without further compromising our quality of life at this point, so will focus on increasing income or just doing what we can within our current means. 

I want to travel with my kids.  And I want to stop putting things off for "when I have enough".  Working on trying to figure out what "enough" is for us so I can enjoy the here and now as well, since tomorrow is not a guarantee.   

Thanks for all the advice. 

arebelspy

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Re: A good simple retirement calc to see how I'm doing?
« Reply #6 on: July 05, 2014, 06:43:46 PM »
Thanks for the link arebelspy.  What is SWR?  We've reduced our expenses as far as we are willing without further compromising our quality of life at this point, so will focus on increasing income or just doing what we can within our current means. 

SWR = Safe Withdrawal Rate.  How much you can withdraw from your portfolio each year, sustainably.  Typically 3-4%

You said 1.25MM for 50k/year, that's a 4% SWR.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Jules13

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Re: A good simple retirement calc to see how I'm doing?
« Reply #7 on: July 05, 2014, 06:48:09 PM »
Oh right.  Thanks!  Good thing to consider. 

tj

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Re: A good simple retirement calc to see how I'm doing?
« Reply #8 on: July 05, 2014, 08:16:27 PM »
Does anyone have a similar calculator which assumes decreasing expenses after a certain number of years (auto loan, mortgage, etc)


arebelspy

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Re: A good simple retirement calc to see how I'm doing?
« Reply #9 on: July 06, 2014, 12:14:41 AM »
Does anyone have a similar calculator which assumes decreasing expenses after a certain number of years (auto loan, mortgage, etc)

www.cfiresim.com lets you put in exactly your expenses and income each year if you'd like.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Fishingmn

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Re: A good simple retirement calc to see how I'm doing?
« Reply #10 on: July 06, 2014, 06:17:46 AM »
www.cfiresim.com lets you put in exactly your expenses and income each year if you'd like.

This is the one I'm using now - 100% success with our plan to retire at end of 2016. It's probably 100% success now but we're going to build up a little extra as DW likes her job.