$1.6M Retirement Balance by age 55?

The Personal Finance section of Yahoo!Finance has many useful calculators. A popular one is called “How much will I need to save for retirement?”. You input your assumptions and it gives you a chart and a spreadsheet of what your retirement balance should look like over the years. So let's see how much savings I need if I want to retire at say age 55.





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?

My Nest Egg Score

AG Edwards has developed a Nest Egg Score to help gauge the level of saving & investing in America. My Score comes out at 777, significantly better than the national average. Which gives me little comfort overall being aware of America's ongoing love story with debt. :)

Based on my score, AG Edwards recommends the following:
1. Continue to manage debt. My only debt is my mortgage.
2. Maximize your retirement contributions. I managed to maximize my contributions in 2007!
3. Consider your other financial goals. Next step is buying a bigger house as the family is expanding.
4. Review your investment mix. I manage my investment actively.
5. Create or review your estate plan. A bit premature as I do not have much of an estate yet.

The questions were general, and the possible answers had wide ranges. But my score will likely change with a major life changing event looming in the near future.