After posting about our expenses, the next retirement nut to crack is savings. Do we have enough?
Ah. The million dollar question. Literally.
We used NewRetirement, a free retirement planning tool to figure out if we were on the right track for retirement. After inputting all of our financial information, and with the assumption that we will continue to contribute the maximum to our retirement account over the next four years, we come out with a ‘great’ score for retirement in 4 years.
Our net worth includes retirement accounts, home equity and cash savings. This program also included our mortgage and healthcare expenses, so if we wanted to, based on the above, we could stay in our home.
Thankfully, we have weathered the stormy markets and have come out ahead. We are more conservative investors, and have rarely averaged a 12% return in a years’ time. Our average is closer to 8%. But we still managed to hit the $1M mark. After 35 years of saving in our retirement accounts, we are finally seeing the fruits of our labor. 😉
What I LOVE so much about the New Retirement site and the chart they provide, is that it lets you know when your social security starts and when you need to take RMDs (required minimum distributions) from your retirement accounts. It also assumes a 2-3% investment growth, which, to me, is very realistic.
So, do we have enough to cover our expenses and retire in 4 years? I believe we do.
I will follow this post up with a future post on how we managed to accumulate $1.7M in net worth. But for now, know that it took hard work, steady investing and a bit of luck. No inheritance. No rich relatives.
How are you doing in retirement savings?