The graph above shows that my retirement balance must be about $1.6M at age 55 to be able to enjoy 30 years of retirement with 75% income replacement.
The spreadsheet below shows my required savings for the next 20 years in order to reach a retirement balance worth $1.6M by age 55.
The bulk of the money comes from the interests. Being able to produce an 8% investment return year after year will be the most challenging part. Is this plan actually feasible?
2 comments:
Interesting information throughout your blog postings. But not many comments? (I jumped to your blog based on a comment you posted over on NetworthIQ.)
Have you seen the replacement retirement income analysis reports put out every few years by a consulting company called AON? Really interesting analysis of what percentage of your working income you would need during retirement to maintain the same lifesyle.
It's really one half of a two part story: 1.) how much will you need, during retirement and 2.) how much will you need to save to get there.
They use some pretty conservative assumptions, but it is good food for thought. For anyone thinking they would like to retire early (myself included) it is a bit of comfort towards knowing what the ultimate target is.
Hi grantnlee,
Thanks for commenting. I am using this blog as a diary more than anything else. I like the idea of being able in the future to look back at my train of thoughts throughout the years.
I am not familiar with AON. I'll check it out. Determining the replacement retirement income is a guessing game, especially when retirement is so far away.
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