Ok, $3,000 might not seem like much for retirement so some people might not understand why I am soo excited to be over $3,000 in my IRA and 401k. Well, I am 25 years old. I just started saving for retirement earlier this year and have gone from $0 for retirement to just under $3,200. I like to think that that is a pretty good amount starting out.
I have set up an excel spreadsheet to calculate some projected retirement amounts. I have started with my current salary and figured a 4% annual raise. I have set up three different scenarios where I will contribute 10% total per year to my retirement with the returns being 5%, 8%, and 10%. Based on my calculations, I can hope to have $863,063 if I earn only 5% on my money. I can hope to have $1,657,763 if I earn 8%, and I can hope to have $2,676,029 if I earn a 10% return. Hopefully I can average 10% returns over the next 40 years to have over $2.5 million by the time I turn 65.
The excel spreadsheet has given me some goal numbers I would like to shoot for in the future. One year from now I hope to have $7,265 total in my 401k and IRA combined. This will require me to put in 10% of my salary and to earn a 10% return. Another goal is when I hope to cross the million dollar mark in my retirement accounts. The retirement simulation I set up shows me crossing over into the millionairre category by the time I am 56 years old or 31 years from now. I am hoping to accomplish this goal 6 years before that when I am 50 years old or 25 years from now. In order to accomplish this I will aim to sock away even more of my hard earned money for retirement when I am able. Hopefully I can average some good returns which will also help along the way.