Charlie wrote:
- quote -

I had 39k for the person with 317k and 32k for the person with 259k. I
used excel PMT function, 4% return, zero ending balance for a period of
10 years.

- quote -

Yes, benchmarks are good. I think rates of return are mis guided...
yes we want a high rate of return, but using rates of return as a check
point is only part of the issue, contribution percentages have an
impact and age of retirement also has a big impact.

I use a table, with an unltimate goal of $2,000,000 at age 68. The
goal is to be in column 1 at the youngest age possible. Using the rule
of 72, I came up with the following checkpoints:

column 1 assumes 6% return, money doubles every 12 years. Goal of
$2,000,000 at age 68, $1,000,000 at age 56, $500,000 at age 44,
$250,000 at age 32. I did not come anywhere close to $250,000 at age
32, so I am not in this column of conservative investing YET.

column 2 assumes 7% return, money doubles every 10.3 years. Goal of
$2,000,000 at age 68, $1,000,000 at age 57.7, $500,000 at age 47.4,
$250,000 at age 37.1. I did not hit $125,000 at age 27, so nowhere
near this column yet either.

column 3 assumes 8% return, money doubles every 9 years. Goal of
$2,000,000 at age 68, $1,000,000 at age 59, $500,000 at age 50,
$250,000 at age 41, $125,000 at age 32. I did not have a $125,000
balance at age 32, so not in this column yet either.

column 4 assumes 9% return, money doubles every 8 years. Goal of
$2,000,000 at age 68, $1,000,000 at age 60, $500,000 at age 52,
$250,000 at age 44, $125,000 at age 36. I am currently antipating
reaching this goal... so right now I need to invest with expectation of
maxing contributions to reach this goal, and maintaining an investment
mix appropriate for a 9% return from now until age 68. This is a 100%
stock portfolio.

column 5 assumes a 10% return, money doubles every 7.2 years. Goal of
$2,000,000 at age 68, $1,000,000 at age 60.8, $500,000 at age 53.6,
$250,000 at age 46.4, $125,000 at age 39.2, $62,500 at age 32. I
reached this goal a few years ago, increasing the amount I contributed
significantly the last 3 years to make this goal. This is a 100% stock
portfolio, and the 10% returns to age 68 were "un realistic", which is
why I increased contributions.

column 6 is an 11% return and column 7 is a 12% return. I made the age
35/32 goals a long time ago... so I am in column 4/5 right now.

This is my 401k balance. I could extrapolate this to my wife's 401k or
either IRA account as well. The goal is check points to know if the
amount currently invested will be enough to reach goal, and the easiest
way to reach the intermediate goals is to increase contributions... not
rely on a rate of return.

Thank you for the response, jM. The numbers you came up with were $317K
with tax advantaged and employer contribution and $259K with no help.
The difference I see is that the employer contribution essentially
made the difference. There is one more step. By the time the money is
accumulated in this scenario the guys are 68 years old. Assume married
and wives the same age, no other allowable deductions at tax time.
They plan to spend every penny of their money by their 78th birthdays.
Giving them a continued average return on their investments of 4% a
year, how much do they have available to spend each year? Kind of like
a mortgage payment in reverse.

Yes, this is not enough by the standard rules of thumb. It is
oversimplified. The most believable commentary I am seeing says these
guys are going to be better off than most. A lot of retired seniors are
right now trying to get by on Social Security alone. Typically the
amount of SS for a couple is less than a $1K a month (AARP), and the TV
news often notes that the person in the news in some terrible incident
has a survivor SS benefit as sole income that is less than half that.
The two men in this senario will most likely have some SS in addition to
their personal efforts. Big changes will happen, but political reality
says there will be some kind of government safety net. And real life
says that even though prudence says plan to live forever, the actuarial
tables smugly tell another tale.

My intent is to find or develop bench marks for reference to my own
situation. Maybe you or someone can post a monthly or annual return on
the original senario that could be derrived from a much better
calculator than is available free on-line.

And just to ice the cake, my computer system or the ISP provider is
having severe troubles in the last few weeks and I cannot expect more
than a few minutes a day with internet access on an erratic schedule.
Such is life.