A New Savings Calculator…That You Control

 

If you’ve been surfing around my blog, you’ve come across the expense tracking sheet and the FIRE Calculator.  (Financial Independence Retire Early).   I’ve recently come across another fabulous calculator that will run models to provide you a line of sight to when you are going to hit a financial goal.    Here’s how easy and painless it is.  All you have to do is enter the following inputs:  (You’ll need a Google Account, to access the workbook). 

  1. Current Savings/Retirement Balance:   Keep it simple. Add up your 401ks and IRAs.
  2. Current Birthday. Your year of birth is more important.
  3. Age you want to retire or hit a goal.
  4. Safe Withdrawal Rate.  This defaults to 4%.
  5. Total Monthly contribution to your 401k/Roth/IRA
  6. Investment Growth Rate.  Careful hear, you want to be realistic.  Last year many people were seeing their 401k grow 15-27%.  Start with 5% to manage this process with a cool head.
  7. Inflation Rate. Defaulting to 2.5%
  8. Expected Tax Rate.  Defaults to 15%.  If you’ve Turbo Tax, the summary sheet provides you your exact Tax Rate.
  9. Expected expenses.  This is where your expense tracking diligence pays you a compliment.

Plug these numbers in, and viola, it provides you the total amount of money you will need to live off and the date that you hit it. It’s a big number, so don’t get discouraged, as you have control over your financial destiny.   You actually have control over spending.  The lower your annual expenses, the less money you need to require to live off of.

You can find the original post and author here: https://www.keepthrifty.com/2017/01/30/introducing-retirement-freedom/ or you jump right to the Google workbook

Here: https://docs.google.com/spreadsheets/d/17jDUnWwUz9rJyMUIv3W2QdP2J9MWMSsdL2AjuaZv3D0/copy?usp=sharing

Give this a good scrubbing and run some models. For some, it might provide you the sense of satisfaction. For others, a wakeup call to make some fine or drastic adjustments to your savings plan.  Either way, it will help you plan.  You spend so much time developing and executing plans for your place of employment, why not for yourself.

For you recent college grads or those in who recently joined the workforce, this tool can help you plan saving for other things like a house, college education for your kids and of course retirement.

Do you want to know more:

http://www.budgetsaresexy.com/2017/03/retirement-freedom-calculator/

Author: Francis Bach

Started out in science and somehow ended up in sales & marketing. Grew into a results oriented sales & marketing professional with extensive experience selling and positioning scientific solutions in the pharma/biotech, life sciences and medical diagnostics markets. In 1998 a created an excel sheet to track spending and cash flow to learn personal finance on my own. They don't teach this in school and by the time one figures it out, most of let all these resources slip through our fingers. It's time to pay it forward to this next gen so that they can shave 15-20 years off for working for "the man" with insights, a library of tools, and motivation from me and plenty of other FI bloggers that I follow.

2 thoughts on “A New Savings Calculator…That You Control”

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