Submitted by bingbangbio t3_10eljid in personalfinance
Just looking for a sanity check.
Say you and your SO are 30yo. You max 2 traditional 401ks for 10 years and then contribute nothing for the following 25 years. At 65yo you retire.
A compound interest calc says that you’d have about $1.9MM in today dollars if the market averaged 5% real returns, which I think is a bit conservative as a rate of return. A 4% yearly withdrawal rate gives you about $76k in annual “income”. If your spend now (at 30yo) is less than that, you’re good right?
I guess you need to factor in the cost of medical care, which I don’t understand yet. But my approximations are ok up to that point, right?
EDIT: re inflation.
That ror is inflation adjusted. I think nominal is 10%, inflation adjusted is 7%, and I used 5% to be conservative. So I’m comparing today dollars to today cost of living for this projection. Nothing’s guaranteed but gotta make assumptions to move forward and the inflation confusion is a common comment in the thread.
Thanks all for the great feedback and advice.