Yesterday I posted our Sept 2016 Financial Status Update. While our savings are growing and we are getting on the right track, I feel horribly behind. We are a year or two away from 30 years old, and have only just started making decent money. The multiple irons in the fire are starting to pay off. But my plan of “earlier” retirement in my early 50’s seems impossible many days.
Here is the current estimate given actual savings rate, a retirement at age 50, and with working a little bit part-time from 50-65 ($15k/year). I delayed taking Social Security until age 70, and conservatively estimated an annual benefit of only $20k combined for my wife and I (SS is heavily underfunded and currently estimated to pay 76% of benefits after 2037 – link). There is a chance I would run out of money before I turned 70, and a really good chance of completely running out of savings in my early 80’s. Very bleak.
Astute readers will notice there was a $700 drop from yesterday to today in total savings/investments. Got to love market volatility, mainly from oil prices and the Wells Fargo scandal. Good thing I am a long-term investor as I have many years and decades to weather these storms.
What gives me some hope though is that the “$18,908 per year” that Personal Capital “sees” me saving each year is probably a low estimate since I have only been using them for a little over a year and I have already saved $23,000+ in 2016 so far. With the same numbers, except increasing annual savings to $25k, I have a better chance of retiring at 50. I won’t be living it up at $45,000/yr nor will I leave an inheritance, but there is a good chance I wouldn’t run out of money before I die.
And if I increase the savings to $30k per year, I am even better off. I should be able to save that much money in all of my retirement and investment account combined, but it will take some effort. And it looks like it may be required if I want to retire at 50-ish.
This last chart looks amazing with a 98% chance, right?! To make this happen, I only need to save $30k per year and work until I am 65. Not ideal and probably overkill for my needs, but it lets me know that my actual retirement is probably somewhere between 55-65. Hence the frustrated title. Some get frustrated and give up; most have at least thought about it. The only way to change the numbers is to make more and save more, which I am working on. Perseverance, hard work, and being uncomfortable with where you are at are key to getting ahead. But it is a painful process.
