I always like to know if I’m on the right path and on schedule with my investing and saving.  I normally keep a spreadsheet of what my net worth needs to be at various points along my journey.  I use this as one of many tools to see if I’m making good decisions about saving, investing and avoiding purchases.  We each have a unique number that we are striving for.  Certainly, for a long time, one million dollars has been the “magic” number.  That’s not quite as magical as it once was but it’s safe to say that if you amass $1 million dollars at any age, you are doing much better than the majority of others.  So what amount of money do you need to have at each age?  Here’s a graph from age 21 up to age 65 with the dollar amounts you want to strive for at each age.  You can reach this number in multiple ways.  You could save more or compound your existing assets by changing your investment strategies.  You’ll find that some years you miss the mark and others you exceed it.  A changing market certainly will take it’s toll.

 

Age 21: $0.00 Age 32: $47606 Age 43: $158606 Age 54: $417418
Age 22: $2860 Age 33: $54274 Age 44: $174154 Age 55: $453672
Age 23: $5948 Age 34: $61476 Age 45: $190947 Age 56: $492826
Age 24: $9284 Age 35: $69254 Age 46: $209082 Age 57: $535112
Age 25: $12887 Age 36: $77655 Age 47: $228669 Age 58: $580781
Age 26: $16778 Age 37: $86727 Age 48: $249823 Age 59: $630103
Age 27: $20980 Age 38: $96525 Age 49: $272669 Age 60: $683371
Age 28: $25519 Age 39: $107107 Age 50: $297342 Age 61: $740901
Age 29: $30420 Age 40: $118536 Age 51: $323989 Age 62: $803033
Age 30: $35714 Age 41: $130879 Age 52: $352769 Age 63: $870136
Age 31: $41431 Age 42: $144209 Age 53: $383850 Age 64: $942607

 

Age 65: 1,020,875

 

Now for the assumptions:

-You invest $2500 per year over your entire life

-You earn an 8% interest rate every year  (In practice, some years will be better, some will be worse)

 

I confess that I love playing with numbers like this.  Using this tool, I can quickly glance at my investment balances and compare that to the chart above to make sure I’m on track.  I actually use a different set of numbers based on my income and my current balances to see where I will be if I keep up at the same rate that I’m investing today.  Since I know I want to have much more than $1 million by the time I retire, I’ve got a more aggressive age vs net worth chart.

Want to create your own chart?  Go to:

http://www.money-zine.com/Calculators/Retirement-Calculators/401k-Savings-Calculator/

and punch in your own numbers!