. I spent a few hours yesterday playing with one of those retirement calculators which tells you how long your savings will last. If you tinker with any one of the variables, like years in retirement, age upon retirement and your income needs for each year, of course, all the numbers will change.
I'm determined to retire early, in 6 or 7 years time, and I need my savings to last until age 95, by which time, I'll promptly keel over. (Just kidding, but we should all find some humor in retirement planning, right?)
Oh, when I say "retire," I mean I want to retire from full-time work, but I'm quite sure I'll want to work part-time, and/or continue my freelance work, for some time. I'm not even bothering to factor that in.
I also figure that about $48,000 in annual retirement income sounds about right. It should leave room for some travel and various comforts without being so much that I can never reach my goal, yet it's not so low that I'd have to skimp or pay much attention to budgeting in retirement (although it's sort of a hobby of mine anyway).
That figure of $48,000 also includes Social Security benefits and assumes I'd start collecting at 62, which IS NOT something I plan to do, but there are a few things like this you can't adjust in the calculator. (I actually plan to hold off collecting SS benefits for as long as possible, up to my full retirement age of 66, since each year you defer your benefit amount increases by 8%.)
So I determined that in order to have $48,000 a year in retirement starting in 6 or 7 years time, and assuming a rather conservative investment growth rate of 6.5% pre-retirement and 5% in retirement, I calculate I need to save a total of $908,278. (As you can see from my sidebar, I'm already up to about $585,000.)
By tinkering with the calculator, I determined that I can do this in the 6 or 7 years before my planned retirement by saving $800 a month, every month from now til then. (I'm not even factoring in the growth of my existing investments, just to play it safe...course, I'm not factoring in any lossss, either.)
It's actually pretty easy to do this working the bank job I have now. Remember, I don't have a mortgage anymore. The job pays about $72K, which is not the most I've ever made, but it's not bad money, either.
So for at least the first 7 months in 2014, I feel confident I can contribute $800, or actually more, to stick to this plan. If the contract job ends in July as it is now scheduled to do, then I will have to revise my savings plan, but I am really sort of hoping I will either get a perm offer or figure something else out.
So for now, instead of just settling for $800 a month contributions, I have already figured I can actually contribute as much as $2,000 toward savings a month. That is 2.5 times more, so I figure it is the equivalent of paying $800 for 17.5 months, not 7, so that is like making contributions into June 2015. Hopefully by that time I will have found other work if need be.
I always make mistakes when it comes to math (!) but I THINK all those calculations are correct. 
Maybe a good reason not to consider doing other people's tax returns, Dido, but I love the idea!
My Countdown to Retirement Savings Plan
December 14th, 2013 at 03:45 pm
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Also, when I make my $6500 traditional IRA contribution next year, the money for the contribution will also likely come from the Barclay account. So the Barclays account is kind of like a temporary parking place for money not yet destined for long-term investments, but at least it earns something. (My checking acct doesn't.) It also serves as the main source of cash for unexpected expenses, like bigger home repairs, as well as things like my new car. I don't, however, make a habit of withdrawing from it very often.
Since I don't have a 401k now, that's the most I can contribute to an actual tax-deferred account, save for a small amount each year (around $1,000 to $1500) I can contribute to my SIMPLE IRA, based on my freelance earnings.
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