March 13, 2008

What I'll need to do to meet my goal

Summarizing from previous posts heres my current situation and goal:

Point A - My current situation:

I own my home and will be paid off in 10.5 years.
Net assets towards retirement plan = $319,214
Net annual savings after expenses: $29,900

Point B - My goal:
Goal: $50,000 / year income (todays dollars) from investments and my house paid off by age fifty

So how do I get from Point A to Point B?

If I assume a 3% annual inflation rate I'll need about $75,600 in annual income in 14 years. I did a little figuring and modeling in Excel and determined that if I start now with $319k and add $30k (29.9 rounded up) every year then I'd need to get about a 6% annual return on my investments in order to have a net worth to provide me the $75k annual income.

6% annual return is not too hard over the long term so I'm in pretty good shape here.

So the bottom line for my plan is:

Save $30,000 per year and make at least 6% on my investments.

No comments:

Post a Comment

I'm starting to get too many spam messages in the comments so I'm turning on moderation. Please be patient and wait for your comment to be approved. Note it may take up to a few days for approval, thanks. I've also had to remove anonymous posting of comments to cut down on spam and pure stupidity.

Blog Widget by LinkWithin