I've been hemming and hawing over putting a new financial goal in place now that I have my car savings and my emergency fund fully funded. So I've decided to bite the bullet and go ahead and make a retirement goal. It's not set in stone by any means but it does give me something to shoot for.
If you take a read through my other retirement posts you'll see I'm not sure what my life circumstances will be when I am ready to retire (or even when I'll be ready to retire!) So I'm assuming that I'll want to retire when ever I am financially able and that I will just need to support myself.
I currently spend about $1,400 per month on average, I'll plan for a slight increase in that amount since I may want a car and some travel money. In retirement I will shoot for $1,700 per month net, which is $20,400 per year net. With current tax rates in my province that would mean I need to gross $24,480 per year in investment income. I also need to have my house (worth $191,000) paid off.
If my withdrawal rate is 4%, then I'll need $612,000 in savings to generate my desired monthly income. In other words between my house and my savings I will need a net worth of $803,000 to retire. My current net worth stands at $143,975.97.
It's hard to get time lines because I'm not sure what to expect in terms of raises but my investment calculator makes 40 seem like a reasonable age to be ready to retire. In order to make it a SMART goal I'd have to say:
I will be able to retire when I am 40 because I will have my house paid off ($191,000) and I will have $612,000 in savings.
Goal: $803,000 by November 2029