Compound growth means that the earlier you start investing the LESS you have to invest. To illustrate this, see the table below.
What percentage of your current income do you need to invest to retire at 65 and replace at least 100% of your income?
I am X years old... | If I invest X% of my income each year... | I will have X% of my income in retirement... |
20 | 9% | 110% |
21 | 9% | 103% |
22 | 10% | 106% |
23 | 11% | 109% |
24 | 11% | 101% |
25 | 12% | 103% |
26 | 13% | 103% |
27 | 14% | 103% |
28 | 15% | 103% |
29 | 16% | 102% |
30 | 17% | 101% |
I am X years old... | If I invest X% of my income each year... | I will have X% of my income in retirement... |
31 | 19% | 104% |
32 | 20% | 102% |
33 | 22% | 104% |
34 | 23% | 100% |
35 | 25% | 101% |
36 | 27% | 101% |
37 | 29% | 100% |
39 | 34% | 100% |
40 | 37% | 100% |
Assumptions/Disclaimer: 7% real growth of assets (accounting for inflation), 4% safe withdrawal rate, current income is indexed with inflation but does not grow, starting investment is $0.00, Rounded to the nearest 1%. For entertainment purposes only.
If you want to check my math or try your own numbers, check out the 'tools' section of this website.
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