Author Topic: Could someone help me with the Maths? Or possibly just the Excel?  (Read 1354 times)

caseyzee

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Hi.  MDM posted this formula on another thread to estimate time to FI.  I've tried plugging my numbers into excel but it spits out a -.87.  Clearly, I am doing something wrong, but I'm not sure what.  Could someone help me please?

The formula was....Time in years to FI = Ln((S + i*E/WR) / (S + i*A)) / Ln (1+i)

Where A = Asset amount currently invested in funds to be drawn in retirement (525k for me)
E = Total annual expenses in retirement, including taxes (estimating 40k for me)
i = Real return on invested retirement funds (Which I'm assuming is return less inflation?  I was assuming 3%)
S =  Annual amount invested in funds to draw on in retirement (Which I assume is my contributions to retirement funds, = 21k for me now)
WR = Withdrawal rate = 4% for me

TIA.
-Casey

Valhalla

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Re: Could someone help me with the Maths? Or possibly just the Excel?
« Reply #1 on: April 13, 2015, 10:40:03 AM »
post your excel formula so we can see the error.

MDM

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Re: Could someone help me with the Maths? Or possibly just the Excel?
« Reply #2 on: April 13, 2015, 10:43:46 AM »
Try copying the lines below and pasting into cell A1 of a blank spreadsheet.

With these numbers I get 26.3 for Time.

S10
i0.03
E20
WR0.04
A50
Time=LN((B1+B2*B3/B4)/(B1+B2*B5))/LN(1+B2)

« Last Edit: April 13, 2015, 10:47:18 AM by MDM »

caseyzee

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Re: Could someone help me with the Maths? Or possibly just the Excel?
« Reply #3 on: April 13, 2015, 10:54:03 AM »
Oh, I got 26.27 for that too!  I'm not sure what went wrong the 27 different times I tried it.

Thank you!

MDM

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Re: Could someone help me with the Maths? Or possibly just the Excel?
« Reply #4 on: April 13, 2015, 11:09:04 AM »
You're welcome - good to see that it is working the same way for you.

ShoulderThingThatGoesUp

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Re: Could someone help me with the Maths? Or possibly just the Excel?
« Reply #5 on: April 13, 2015, 11:29:32 AM »
Huh. I'd never actually done the math. On track to be FI around 40. Will just be working to make sure my kids are set after 2030. Cool.