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Applejuiceinthehall t1_iuk2yvs wrote

You need to work backward from your goal. The general rule of thumb is 80% pre retirement income.

So, let's say you need 56,000 a year. Multiple that by 25 you will need 1.4 million. Now, look for a future value calculator online (or you can look up how to do formula on excel). Plug in goal and see how much you need to save yearly. If you are over that amount, then you will have more in retirement, or you will be able to retire early. If you are under, then you need to save more or retire later.

You might also run multiple by 30 or 33 if you want to be conservative.

Finally, if you're thinking, "I'm going to make more than $70k when I retire." You are probably correct. The way to deal with this is that every time you get a non-cost of living raise, you need to save half of the raise. Doing this means you are saving for your lifestyle creep. You don't need to save cost-of-living raises, but you can if you want.

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