I have a chart I use to track retirement savings. It can be easily created in excel.
top row is return percentage (before inflation.
row 1
Column C is 6%
Column E is 7%
Column G is 8%
Column I is 9%
Column K is 10%
Column M is 11%
Column O is 12%
row 2
row underneath is "years to double". 72/%
C=12 (72/6=12)
repeat forumula C2:I2
in cell B3 type in retirement age (68 for me).
in cell C3 type in your income/.04. (80,000/.04) for me= 2,000,000
this means the retirement goal is 2,000,000 at age 68.
in cell B4, subtract C2 from age
in cell C4 divide C3 by 2
meaning X years to double needs half the amount.
repeat. in B5, Subtract C2 years from age in B4. repeat this formula down. In C5, divide C4 by 2. Repeat this formula down.
Columns B and C show age check points for a 6% (conservative) return. If you meet any of the age/amount goals at a young age, you will have smooth sailing to retirement (and could probably retire early).
Repeat this for other return amounts. The goal is to be as far left as young as possible.
For a 12% return, I would be putting 30% in small caps and 50% in international stocks... by 10% I would be much more conventional (40%+ in domestic large caps for example). For 7% return, I would start owning bonds (to preserve amount already accumulated).
Tracking retirement saving progress
February 21st, 2007 at 11:47 am
February 21st, 2007 at 01:34 pm
February 27th, 2007 at 12:11 pm
February 27th, 2007 at 12:33 pm
February 27th, 2007 at 12:35 pm
February 27th, 2007 at 12:47 pm
February 27th, 2007 at 01:01 pm
buffer % 25%
income buffer $62,500.00
withdraw rate 4%
amount needed $1,562,500.00
Retirement age 67
Return (%) Years to double
6.0% 12.0
age 67 55.0 43.0 31.0 19.0 7.0 1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13
7.0% 10.3
age 67 56.7 46.4 36.1 25.9 15.6 5.3
1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13 24,414.06
8.0% 9.0
age 67 58.0 49.0 40.0 31.0 22.0 13.0
1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13 24,414.06
9.0% 8.0
age 67 59.0 51.0 43.0 35.0 27.0 19.0
1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13 24,414.06
10.0% 7.2
age 67 59.8 52.6 45.4 38.2 31.0 23.8
1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13 24,414.06
11.0% 6.5
age 67 60.5 53.9 47.4 40.8 34.3 27.7
1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13 24,414.06
12.0% 6.0
age 67 61.0 55.0 49.0 43.0 37.0 31.0
1,562,500.00 781,250.00 390,625.00 195,312.50 97,656.25 48,828.13 24,414.06
I transposed rows and columns prior to pasting here.