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Originally Posted by Big G
As of the end of the day yesterday my 401k has a balance of $3,892.29. I will have been paying into it for 2 years this June. My company only started kicking in after I had been with the company for 6 months.
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My numbers probably shocked you... my bad. This table is meant to be a stepping stone. You have been saving for 2 years. NO WAY would you have hit those numbers. NO WAY.
Create a short term plan to MONITOR progress. This table is the monitor, you are saving enough and just need more time. To make sure you are on track, check the table once you hit ~15k.
The 12% chart is this.
12.0%
6.0
age
67 1,000,000.00
61.0 500,000.00
55.0 250,000.00
49.0 125,000.00
43.0 62,500.00
37.0 31,250.00
31.0 15,625.00
You are well on your way to 15k at age 31. You could lose money and still be here (saving 10%@7 yrs*3200 yr).
This would be your "minimum". 12% return can be done for short amounts of time. 12% returns for ~3 years should move you to 10% table.
Then look at 10%.
10.0%
7.2
age
67 1,000,000.00
59.8 500,000.00
52.6 250,000.00
45.4 125,000.00
38.2 62,500.00
31.0 31,250.00
23.8 15,625.00
You can then say 31k at age 31 is more likely ( 7 years, 3k each each year (if saving 10%), is $21000. You will be close with 6% returns between now and age 31.
You will be living the 10% world until you reach either 31k at age 31 or 62k at age 38. The you can move the area of more conservative investing (for early retirement).
The sheet is designed to tell me when I can adjust my risk downward (own more bonds). Right now I am at 0% bonds because I am in 10% territory. Getting to a 9% milestone means I had 2-3 good years since hitting a 10% milestone a few years back.
It's a way to emasure progress. My wife only has 10k in her 401k and isn't even on any of the charts (no where close). My Roth is barely on the charts as well (meaning I have more work to do).