Find Out If You’re On Track To Retire Early

Money Magazine this month published a chart that quickly tells you if you’re on track to retire at age 60. If you hope to retire at age 60, your savings should equal this number times your salary:

Your Age
Savings-to-Income Ratio
250.1
300.6
351.4
402.4
453.7
505.2
557.1
609.4

The chart assumes a 35-year retirement at age 60 with 80% of pre-retirement income. It also assumes social security starts at age 62, a 4% real rate of return (after inflation), and an initial withdrawal rate of 4%, adjusted each year for inflation. For those with a pension, it assumes the payments equal 25% of pre-retirement income. And for part-time work in retirement, it assumes that will continue for 10 years during retirement and equal 25% of pre-retirement income.

And if you like calculators as much as I do, click here for an online version of this chart. If you find the results a bit depressing, feel free to share your frustrations in a comment.

Published or Updated: May 17, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Rob In Madrid says:

    one thing I dislike about “retirement” calculators is they all make the same assumption, that one needs to work 40+ years and have millions in the bank to retire.

    Yuck what a horrible thought working till your 65 even 60. Even if you like your job do you really want to spend the next 30-40 years there.

    A big no.

    Thankfully there is a simple easy to do alternative. Super early retirement say before 40, as impossible as it sounds loads of people have done it. For Canadians Derek Foster (Canada’s youngest retiree at 34) for Americans check out the Millionair Mommy next door blog. She went from working Mom to retired SAHM and SAHD in a short 10 years. The only thing lacking on her blog is more about frugal living, but that’s why we have blogs like this and the simpledollar.

    To me the whole reason of frugal living is to escape the rat race. While I haven’t gotten there yet I’m determined to keep my working years as short as possible.

    If one can learn to live well below your means super early retirement can be possible.

  2. DR says:

    Rob In Madrid, most calculators do assume you need 80% or more of your current salary in retirement. I know we’ll need a lot less. To use the calculator in that situation, just put in a lower amount for income that corresponds to what you think you’ll need in retirement. But as always it’s a balance. I could probably come close to retiring today if I made significant changes to my life. For me, those changes wouldn’t be worth it. Of course, we all have to make that decision for ourselves.

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