I enjoyed playing around with Personal Capital retirement planner tool. PC is similar to other online platforms such as Mint that basically keep track of your expenses and various accounts. I’ve used Mint in the past but for now I’m using PC and I like it.
Let’s get right to it. I plugged in my current invested assets of $425,000. Then $120,000 that I will invest annually along with my current age of 37 and retirement age of 41. I will get a pension by age 65 worth $24,000 annually and I will take S.S. by age 70 worth less than $30,000 per year.
I have a 96% chance of retiring at age 41 and having my investments last me until age 94 with about $30,000 of income annually starting at age 41. $30k is my after tax amount so pretty clever of the program to account for that. There is a window where you can adjust what tax bracket you think you will be in, what you think the inflation rate will be and your life expectancy.
Personal Capital Retirement Planner
On the x-axis the first turquoise dot is my current age, 37. The purple dot is age 41 and you can see in the dark blue (poor market performance) my funds would steadily decline until age 65-66. The light blue area shows my funds in a better performing market. So worst case scenario I’ll have $1.5 million at age 94. Best case scenario I’ll have $5.5 million.
The above bar graph shows how much I could potentially take out every month and still be OK ($4,767/mo) and how much I want to take out ($2,500/mo). The higher number corresponds to a better performing market of course.
Interactive Tools
This interactive box allows you to put in various income ‘events’. I will be adding about $120,000/yr to my savings until age 41. In the second box I will have social security kick in by age 70 at around $26k/yr. In the third box I will have my work pension kick in by age 65 at about $24,000/yr.
This box is also interactive, I indicated that I want to spend about $30k/yr (it’s adjusted for inflation) starting at age 41. You can add many different things in your spending category.
Overall this is great, not just because it shows that I can actually retire at age 41. But because it’s very interactive, very intuitive, very well done and appears complete. Kudos to you Personal Capital.
Update: 12/28/2015
There have been some changes so I adjusted my input in PC’s retirement planner. I have less invested now because I bought a condo and I have decided that I’m gonna still pick up a few shifts when I retire early which will generate a little bit of income (that way I don’t lose my medical license).
My investments are lower but based on 2014 I anticipate being able to save $160k a year (yes, quite ambitious).
Social Security Income
I lowered the Social Security income just a tad, I still believe some sort of government pension plan will exist for the general population but I don’t think it will be as generous as I wish it could be.
I added the ‘working during retirement’ at $30k a year most of which I think I will keep because I would max out a solo 401(k) or a job sponsored 401(k).
I am being overly aggressive with my spending estimates of $29,000 a year because now that I own a condo my expenses should be a lot lower. We shall see. I haven’t done too well this year, my expenses were higher than I hoped.
Health Insurance
I will need to obtain my own health insurance once I retire at age 41, so I added $3,600/yr for that.
Finally, for shits & giggles I decided to add a one-time expense of ~$100k for a vacation home. It probably would be an investment property in another country or state or it might just be a vacation home, who knows.
Update 4/29/2021
The Personal Capital retirement planner was priceless. It helped me play around with the numbers and figure out what I should expect in the future.
But at the age of 43 I’m not concerned anymore with retirement. I am focused on finding the kind of work I don’t want to retire from, as Joshua Sheats always says on his podcasts.