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This is a spin off from the retirement thread. Realistic retirement numbers?
Posted on 6/1/17 at 3:58 pm
Posted on 6/1/17 at 3:58 pm
I'll admit. Math was never my thing. I would like some opinions on this setup.
Current employment salary is set to increase probably by ~50k over the next 10 years
Employer has no benefits, such as 401k.
I currently have:
IRA (maxing yearly)
IRA (wife's - which i am contributing to as kind of my own, and maxing yearly)
Taxable account (usually about $5k a year)
Is this a good enough setup for retirement? I kind of feel hamstrung on what I can do.
Also, if I am contributing $15,000 (total yearly) for the next 30 years, among these three vehicles, am I looking good?
Current employment salary is set to increase probably by ~50k over the next 10 years
Employer has no benefits, such as 401k.
I currently have:
IRA (maxing yearly)
IRA (wife's - which i am contributing to as kind of my own, and maxing yearly)
Taxable account (usually about $5k a year)
Is this a good enough setup for retirement? I kind of feel hamstrung on what I can do.
Also, if I am contributing $15,000 (total yearly) for the next 30 years, among these three vehicles, am I looking good?
7
Posted on 6/1/17 at 4:00 pm to HailToTheChiz
Yeah I have that question as well. 24 year old. I'm thinking I will need 10 mil to retire at 55?
Posted on 6/1/17 at 4:08 pm to HailToTheChiz
Too many variables like how old are you now? What age do you want to retire? Life expectancy? What is your income? What is your debt? Expenses pre-retirement compared to post-retirement?
It's a complicated question. Without going into all of that a decent rule of thumb to keep it very simple is that if you start saving 15% of your gross income for retirement relatively young and do average on your investments, then you should be in pretty good shape to retire at a normal retirement age.
So if your $15k a year in savings is based off around a $100k income then that's great. Grow it as your income grows. If you find yourself making 200k and still saving only $15k then you will get off track in terms of replacing your pre-retirement income in retirement.
It's a complicated question. Without going into all of that a decent rule of thumb to keep it very simple is that if you start saving 15% of your gross income for retirement relatively young and do average on your investments, then you should be in pretty good shape to retire at a normal retirement age.
So if your $15k a year in savings is based off around a $100k income then that's great. Grow it as your income grows. If you find yourself making 200k and still saving only $15k then you will get off track in terms of replacing your pre-retirement income in retirement.
Posted on 6/1/17 at 4:09 pm to elposter
quote:
So if your $15k a year in savings is based off around a $100k income then that's great. Grow it as your income grows. If you find yourself making 200k and still saving only $15k then you will get off track in terms of replacing your pre-retirement income in retirement.
Gotcha.
I'm at least 30 years from retirement age. I see what you're saying. Obviously a lot of variables change.
Posted on 6/1/17 at 4:14 pm to HailToTheChiz
quote:
HailToTheChiz
How much do you anticipate to need in retirement? What age and what kind of risk can you accept (also what kind of return do you expect)? Will this savings increase over time?
$15k isn't a whole lot (depending on salary required in retirement), especially in taxable vehicles, but it's better than most.
There's a whole lot of assumptions to be made to calculate a number.
Posted on 6/1/17 at 4:18 pm to HailToTheChiz
For semi-early retirement, you need about 25x your annual spend when you retire.
If you are retiring closer to traditional retirement ages, it would be much lower.
If you are retiring closer to traditional retirement ages, it would be much lower.
Posted on 6/1/17 at 4:18 pm to elposter
quote:
Expenses pre-retirement compared to post-retirement?
Having no debt at retirement is a huge variable.
Posted on 6/1/17 at 4:56 pm to HailToTheChiz
Posted on 6/1/17 at 6:14 pm to RickySauwce
Without getting too deep into your business, can you tell us how you arrived at that figure?
Posted on 6/1/17 at 10:39 pm to RickySauwce
quote:
Yeah I have that question as well. 24 year old. I'm thinking I will need 10 mil to retire at 55?
Are you a professional athlete? If you start saving and investing $90,000 now, every year, until age 55, you should reach $10M.
Posted on 6/1/17 at 10:49 pm to PhiTiger1764
Speaking of retirement, I'm having some trouble finding a concrete answer. The historical SP500 7% that you see advertised, is that adjusted for inflation or no? Do I need to account for that in my calculator?
Posted on 6/1/17 at 10:55 pm to RickySauwce
quote:
Yeah I have that question as well. 24 year old. I'm thinking I will need 10 mil to retire at 55?
lolwut?
Posted on 6/1/17 at 11:19 pm to HailToTheChiz
quote:
Is this a good enough setup for retirement? I kind of feel hamstrung on what I can do.
Also, if I am contributing $15,000 (total yearly) for the next 30 years, among these three vehicles, am I looking good?
No idea. If 15k is at least 20% of your gross salary then more than likely you're on a good track. Though the amount you save is just half of the equation. The other factor is how well your investments do for the next 30 years.
Expenses is the big unknown. You could be under or over saving depending on what you spend in retirement.
The best retirement calculator I've seen so far is this one: https://www.marketwatch.com/retirement/tools/retirement-planning-calculator
Of course it's only as good as the assumptions you use.
Posted on 6/2/17 at 1:32 am to HailToTheChiz
Simple math if you have access to a financial calculator. Future value of your current assets plus annual/monthly contributions at an expected rate of return. I calculated mine today, and crossed my fingers when it came to my wife's state retirement.
If you're not familiar with the calculations, get someone who is in the know to project them for you. I'd guess plenty of folks on this board could calculate it for you in detail if you're willing to get them the numbers.
Might be the best thing you could do, especially if you are young and can catch up in your investing before expenses of family life catch up to you (speaking from experience here.}
If you're not familiar with the calculations, get someone who is in the know to project them for you. I'd guess plenty of folks on this board could calculate it for you in detail if you're willing to get them the numbers.
Might be the best thing you could do, especially if you are young and can catch up in your investing before expenses of family life catch up to you (speaking from experience here.}
Posted on 6/2/17 at 10:34 am to GenesChin
quote:
Expenses pre-retirement compared to post-retirement?
Having no debt at retirement is a huge variable.
if you have debt other than a mortgage when you retire, you are straight up fricked. If you can't afford to buy things without financing, you shouldn't retire.
Even a mortgage is iffy in retirement.
Posted on 6/2/17 at 12:58 pm to jimbeam
quote:
Speaking of retirement, I'm having some trouble finding a concrete answer. The historical SP500 7% that you see advertised, is that adjusted for inflation or no? Do I need to account for that in my calculator?
Yes, that's the real return, adjusted for inflation.
Posted on 6/2/17 at 1:31 pm to gpburdell
I can't wait to send some of these retirement calculator screenshots to my wife. If she keeps working until 60 the age I can retire is ridiculous 
This post was edited on 6/2/17 at 1:32 pm
Posted on 6/2/17 at 1:35 pm to RickySauwce
Damn 10 mil by 55? Is that all in or just investments. I am hoping for 10 mil within the next 25 years excluding real estate. Was worried for a while but I just switched jobs and my new employer match/profit share is going to put me close to the $54k annual limit. 
I should be able to hit it.
I should be able to hit it. Posted on 6/2/17 at 1:40 pm to MSTiger33
Posted on 6/2/17 at 1:44 pm to Bill Parker?
quote:
Simple math if you have access to a financial calculator. Future value of your current assets plus annual/monthly contributions at an expected rate of return
This is the one in excel. right?
=-FV(annual% return, X years, annual contributions, initial balance, flag=1)
So for example, if I only needed 10 mil in retirement I would need an annual contribution of around 150K for 25 years
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