Retirement Account & The Next 10 Years

One of the benefits offered by my company is a certain percentage of my gross salary is vested toward retirement. This is separate from the 3% company match. This year that number was about $1100. This boosts my 401k balance to over $12k.

I’m shifting more and more toward a retirement mindset and less from becoming debt free as I get closer to paying Navient off.

These are my loose plans and I honestly have no clue what the future holds for my career / earnings potential, living / relationship. numbers I came up with on my current salary, which for arguments sake say it’s close to the national average.

2017: $1000/mo -> +$12k -> $24,000
2018: $1200/mo -> +$14.4k -> $38,400
2019: $1500/mo (maxing out 401k) -> $56,400 (car will be paid off)
2020: $2000/mo -> $80,400
2021: $2000/mo – > $104,400
2022: $2000/mo -> $128,400
2023: $2000/mo -> 152,400 (the year I turn 40)
2024: $2000/mo -> $176,400
2025: $2000/mo -> $200,400
2026: $2000/mo -> $224,400 (age 43)

Using the 2020 numbers as an example with a future value of money calculator…

$80,400, adding $2,000 per month at age 37 @ 10% interest and continuing for 14 years. That makes me a millionaire and able to retire by age 51 assuming my income stays what it is and my cost of living doesn’t suddenly spike. If I take that $1,051,771 and don’t add anything to it, in 10 more years at 10% I’ll have $2,847,188 at 61. Is $2k a month a lot of money? To me in 2016 dollars on my current income yes. In 4 years assuming I get a 4% raise each year? Maybe not.

I don’t know what the future holds, but I do know this. If you want to have money when you’re older you need to start young. Maybe that means not buying the Mercedes or BMW but a more modest car instead. Or renting for a while and not sinking a ton of money into a house. I’m really seeing the light on how the poor stay poor and the rich get richer.

Last but not least, here’s another big kicker. There are people making $100k+/yr now who could easily speed this whole process up considerably and still have a decent life.

It’s late as I write this, but I just hope someone thinks about this before making a huge purchase that makes then a total slave to a job, bank or other financing company.

One thought on “Retirement Account & The Next 10 Years

  1. You’re very lucky of the company offering that match. My former employer did as well, and let me tell you, it added up so quickly over time. By the time I left there, the amount in my pension was about 75% in value of what my own TDA (tax deferred account) balance was. It helped that they put in more money as you grew older, 5% until you reached 40, and then 10% after that. (The only good thing I felt about turning 40 at the time.)

    You are so right about really thinking about major purchases before you do them. My last major purchase was a car and an RV in which I now live. Both have treated me well, and the car, while being used, was only 2 years old at the time and is dependable and I take good care of it. I think it will last a long time. The RV, while i know it is a depreciable asset, has also served me well by giving me an inexpensive roof over my head and will allow me to move to my next position and live a very economical lifestyle.

    Keep up the good work.

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