Just a 46-year-old mom of 2 in Northern California. My kids are Monkey Monkey(MM) and Drama Llama (DL). I am married to Monkey Hubby (MH). I saw Lilyc's post on the subject and found the link interesting. Sure there are MANY different ways to figure out how much you should save for retirement. BUT what struck me as interesting was the idea that this model is successful 90% of the time? Hmmm...
Using their table, we should be saving around 11% gross to retirement. (Which we are).
Of course, I came across this the other day as well:
The Easiest Retirement Calculator Ever
http://www.fool.com/personal-finance/retirement/2008/03/13/t...
The interesting thing is using this calculator I do come up with $5 mil for retirement, which is what I have come up with more complicated determinations.
Keeping in mind that I am young (lots of inflation there) AND that I have way too many unknowns at this point.
Will 11% get me there? Hmmmmm. If I work to full retirement age (like 65?). I guess, perhaps.
At first glance I found the first table a little too lowball, but as I run the numbers, it actually is rather in line with my $5 mil goal.
I was pondering as well since a comment was left in my blog that I was probably further along than I though. I thought, oh no, no no no. I am farther behind than I should be.
But the reasons I feel this way are many:
1) I want to max out my retirement while young. So if I am disabled in my 40s, hopefully I have a good start to my retirement. (I always prepare for the worst).
Likewise I want to put more away while my industry is red hot. The pendulum swings both ways.
Finally, I want to put as much in while I can. Because a 2nd income down the road could keep us from putting money in tax-deferred accounts (could raise our income above the tax limits). So we take advantage best we can now, with low taxes and little worry about being over the threshholds.
2) I want to retire early. I would probably love to work well into my 70s or 80s (I am one of those). But in my 40s I want to get to the point where I don't have to work full-time and in my 50s/60s I want to be at that point where I don't HAVE TO work.
As such, I have to cram as much into my retirement in my 30s, because I expect to not necessarily have the income in my 40s to heavily fund it. I want most of it to be funded sooner rather than later.
So, with all these thoughts in mind, 11% seems little lowball. I am aiming for 15% and can easily see getting up to 20% in a few years (with a roundabout goal of 25% max on one income and maybe more with 2 incomes).
That's my goal for the next decade and then maybe we will re-evaluate. Well, that's the thing too. The more we put in now, the less we have to later. That whole power of compounding thing.
Oh, and the other reason (duh) for my worry over our retirement is that it is mostly funded by my employer right now. Which is great, but I want to be sure I can put away the 15% from my own money if my job situation changes. I totally forgot that when I first posted this. But is a big reason why I am concerned about filling it up more rapidly right now, since I am not putting much in myself.
Well, it's nice to hear I have good odds to making my retirement goals.
March 18th, 2008 at 03:08 pm 1205852895
$5 million is my quit work number too. Anytime between now and 65 I hit that in investable assets, it be quitting time.
Until then, I'm the mule plowing the back 40.