Financial Plan: Retirement Goals

Setting SMART Retirement Goals

I want to set “SMART” retirement goals for myself. And by “SMART” I mean…

  • Specific (simple, sensible, significant).
  • Measurable (meaningful, motivating).
  • Achievable (agreed, attainable).
  • Relevant (reasonable, realistic).
  • Timely (time-based, time-sensitive).

I decided it was time for me to formally write out my financial plan. I have a number of different retirement projection spreadsheets, but now I need a more formal written financial plan that I could reference from here on out.

I started by documenting my retirement goals. I am in my early 30’s so I am projecting ahead (aren’t we all when it comes to retirement though?). I used my plan to organize my exact goals for retirement and I classified my retirement goals into 4 specific and measurable categories.

  1. Extremely early retirement: retire by 50, aka “Dream Retirement” scenario
  2. Very early retirement: retire by 55, and I would classify this as a “Stretch Goal”
  3. Early retirement: retire by 60, and this would be my “Target Goal”
  4. Retire by 65 and this would be considered my “Threshold Goal”, aka, I would be very disappointed if it took me until the age of 65 to retire

“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” —Pablo Picasso




Retire by Age 50: “Dream (Early) Retirement”

As of July 2017, retirement projection for 2035 is $1.85M w/8% return
(6% = $1.45M / 10% = $2.38M)

  • $60,000 annual income / $5,000 monthly (2017 dollars) would equate to $93,500 in 2035 dollars (2.5% inflation rate) = $1.56M needed in retirement savings
  • $85,000 annual income / $7,000 monthly (2017 dollars) would equate to $132,500 in 2035 dollars (2.5% inflation rate) = $2.42M needed in retirement savings
  • $100,000 annual income / $8,300 monthly (2017 dollars) would equate to $156,000 in 2035 dollars (2.5% inflation rate) = $2.61M needed in retirement savings

Retire by Age 55: “Early Retirement”

As of July 2017, retirement projection for 2040 is $2.9M w/8% return
(6% = $2.1M / 10% = $4M)

  • $85,000 annual income / $7,000 monthly (2017 dollars) would equate to $150,000 in 2040 dollars (2.5% inflation rate) = $2.4M needed in retirement savings
  • $100,000 annual income / $8,300 monthly (2017 dollars) would equate to $176,000 in 2040 dollars (2.5% inflation rate) = $2.93M needed in retirement savings
  • $120,000 annual income / $10,000 monthly (2017 dollars) would equate to $212,000 in 2040 dollars (2.5% inflation rate) = $3.63M retirement savings

Retire by Age 60: “Retirement”

As of July 2017, retirement projection for 2045 is $4.43M w/8% return
(6% = $2.9M / 10% = $6.6M)

  • $120,000 annual income / $10,000 monthly (2017 dollars) would equate to $240,000 in 2045 dollars (2.5% inflation rate) = $3.66M needed in retirement savings
  • $144,000 annual income / $12,000 monthly (2017 dollars) would equate to $287,000 in 2045 dollars (2.5% inflation rate) = $4.5M retirement savings

Retire by Age 65: “Late Retirement”

As of July 2017, retirement projection for 2050 is $6.69M w/8% return
(6% = $4.1M / 10% = $10.9M)

  • $200,000 annual income / $16,666 monthly (2017 dollars) would equate to $430,000 in 2050 dollars (2.5% inflation rate) = $6.67M retirement savings




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