As a follow up to an earlier post on my BHAG:
I had posted about my goal to surpass $150k in retirement by age 35, which was a really huge/big/aggressive goal. So I did not beat myself up when I did not achieve at age 35. I knew I would be pretty darn close?
How close? About 5 months after turning 36. Because I achieved the goal yesterday. Well, I think that is AWESOME. Good enough for me...
If investments return 8%, than this means we are earning more than we are putting in, at this point. Since the only retirement vehicles at our disposal are the ROTHs.
I think this is why I am not feeling behind at all with the loss of work retirement plan. It was a very generous 10% contribution by employer. But it was invested conservatively for my mostly "retirement age" co-workers and eaten up by administration and investment fees. Compounding has easily taken over those contributions. Sure, another $8k per year to our retirement funds, in addition, would be awesome. But, it's just we aren't falling behind or feeling the pinch. & maybe $8k only felt like $4k with all the other factors, and we have been easily able to make that up. I appreciate that I had that extra compensation in the years we really needed it - very early on and our lowest income years (maternity leaves and such). This means our retirement was always growing very healthily and is why we were able to meet this goal.
I also just noticed that we surpassed the $200k mark on our investments. Woohoo!! $100k was surpassed some time in 2009. Which means it literally took about a decade to save $100k but only 3 years to turn $100k to $200k. $200k can turn into $400k over 10 years if we don't add another penny. The power of compounding at work. I have this large feeling that the early years were by far the hardest and that we are over that hump. This compounding stuff sure makes life easier.
I also think this is why it is hard for many to understand why my spouse has not had to work. I've said here many times that we always saved 100% of my spouse's income, which laid a nice financial foundation. Anyway, I remember someone telling me very early on that they "to each their own," but how they just could not neglect their retirement like that.
Neglect retirement? Who said anything about neglecting retirement?
I haven't really set the next BHAG for retirement. I am thinking I should just set it to "$500k by age 45." It's about as realistic as "$150k by age 35" felt. It sounds huge, but I know it is doable. A modest rate of return and current contributions (just the ROTHs) will easily put us to $400k+. So $500k is my aggressive twist on the goal. It should be easy to remember. I think that visualization is very important - our subconscious works in ways we don't even understand.