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warrenps wrote:
I will be adding approximately 10k per year for the next 10 years.

I would like to have about 40k per year in retirement (in today's dollars) when I reach 65 in 11 years.

This is doable, but just barely, assuming the 40K is before taxes. I did a real quick projection using the following assumptions:

8% return per year until retirement
3% yearly inflation
6% return after retirement
$40K today is equivalent to $55.369K in 11 years
$290K initial investment
$10K per year investment for 11 years
54 Current age
65 Retirement age
85 Age at death

With these numbers, you should have approx $842K at retirement. If you then start withdrawing $55.369K (before taxes) a year and adjust that amount upward for inflation each year, you would run out of money the year you turn 85.

Bear in mind this is a very simple-minded projection and doesn't account for real life. If during any year or stretch of years the return is less than the average 6%, you could be in trouble. It also doesn't take into account any Social Security or pension benefits you may have. And lastly note the withdrawal amount is pre-tax, so you must decide the tax bracket and/or capital gains rate that is appropriate.

A word of caution about your expected withdrawal rate. $55,396 is about 6.5% of $842,000. Lots of dicussion here and other places in the past have suggested/shown this is much too high a withdrawal rate under anything but ideal circumstances which Life never is. The quoted safe figure varies, but seems to be about 4% to 5%. Reading previous messages on this board would provide a wealth of opinions.

Hope this helps.

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