To achieve our net worth goal of $1.5M in 20 years, we need a plan. Below are our net worth goals for each year (click on spreadsheet to enlarge). This plan assumes an average annual return of 8%, and our ability to increase our investments as our careers develop.
As you can see, if we are able to hit our targets, we are still almost $300K short of our $1.5M goal. I guess that’s why they call them “stretch” goals.
If we believe that we can live on $60,000/year when we retire, then using a 4% Safe Withdrawal Rate (SWR), our nest egg goal is $1.5M. However, with inflation averaging 3.43% annually, our nest egg may need to be substantially larger.
We will refine and better define our plans/goal as time goes on. Some other challenges in reaching our goal include being able to purchase (and pay off) a home and finding affordable long term health care. Our desire to have children will also affect our saving/investing rate, but won’t stop us from having them.
I guess if I have to work until 53, I could live with that.
a Pay off 401K loan
a Pay off credit card debt with rate interest over 0%
a Save up 2 weeks worth of vacation (in case of job loss / unable to work)
Pay off 0% interest rate credit card debt
Open and fully fund Roth IRA for wife
Open and fully fund Roth IRA for husband
Sell Car 1
Pay off Car 2
10% (of gross income) contribution to 401(k)
Build emergency fund to $12,000
We’ll be selling Car 1 and funding Roth IRA’s for my wife and I in the coming months, so more checkmarks will be added soon.