Retirement calculators out there offering to calculate how much you’ll need in retirement. I love thinking about retirement (even if it is 40+ years away), and am saving almost 50% of my after-tax income, a large portion of that in my Roth IRA and Individual 401(k).
Thinking in the long-term can be pretty depressing, and even looking at the ideal amount of savings by age 30 can be hard for some people to handle, so I got to thinking: how much additional money I would need to invest this year in order to retire one day early?
I’m making several assumptions. The first is that at the current rate, I would be saving enough to retire at age 65. Additionally, I’m assuming I would need $100,000 a year in retirement, which seems reasonable.. Finally, I would earn 8% on my investments until I reached retirement. I do not account for inflation in this calculation. Based on this, it seems that in order to take out $100,000 a year, I’d need about $274 a day.
I Need to Save $12.61 Today To Retire 1 Day Early
That means that I would be able to retire a day early if I saved an extra $274 for my 65 year old self, right? I’m 25, so I have 40 years ahead of me. By plugging all this into a time value of money calculator, I’d have to put away $12.61 today in order to have $274 when I’m 65 and be able to retire one day early.
Not terrible, but what if I only needed $75,000 a year in retirement? It drops to just $9.46
Try It Yourself
How much do you have to save to retire a day early?
If you want to check out how much you’ll need to save today to retire 1 day early, here’s a link to the spreadsheet. Feel free to play with the numbers for yourself!
If you bring your lunch to work one or twice this week instead of going out to lunch, that could mean you’ll be golfing one day earlier!