Everyone has different financial goals in life. For a long time it was the ambition of many people to have a million dollars by the time they retire. Unfortunately a million dollars isn’t quite what it used to be but it’s still a substantial sum of money.
As I’ve continued to save and invest over the years, I’ve often thought, “hmmm, how much money should I have saved by now?” My target is north of $1 million dollars but it’s still a good frame of reference for me.
I previously asked the question, “What should my net worth be at 30 years old?” It turned out that assuming I was making 9% interest and was not making any further contributions, my net worth needed to be about $62,500 at age 30. Well, using the rule of 72, I can see that at 38 years old, I’d need to have $125,000 set aside by now.
Here are the data points from the previous post:
30: $62,500
38: $125,000
46: $250,000
54: $500,000
62: $1,000,000
It just so happens that I’m 38 years old now and have that figure beat quite significantly. The good news is that I’m also maxing out the 401k contributions, as well as other investment avenues so I can feel somewhat confident that I’ll really beat the $1M mark at age 62 assuming I can earn a solid rate of return (not easy to do these days), and that I don’t experience any major setbacks.
I also may opt to settle for something less than my goal if I stay on track with my current saving and investing. I don’t want to work until I’m 62 years old so we’ll be working hard to pay off our mortgage and avoid all other types of debt so that we have more options to retire earlier than that.