Retirement Projection

So Fidelity has that handy tool to show you how they think your retirement savings are going.  Of course despite knowing that I’m better off than 90% of the US population, it says I’m way behind on retirement… but of course the more in my retirement account, the more money my investment firm makes.

Okay, so despite being 40, and having over 500K in my retirement, fidelity thinks I’m in fair shape, and almost in the dangerous red zone (where we stop caring about retirement… how clever of them).


Wow, so at retirement (age 65) they think I will have nearly 2 million dollars (2041).   They think I’ll need 11K a month (which may not be that far off given inflation).    This would leave me with a shortfall of 1300 dollars a month.

Okay, that’s below market.  I figured this to about 2.5%.  Bump that up to 5% and that turns in to about 3 million (or 2.6 million using what they call ‘above market returns).

So the question is… how do we safely earn 5% over the next 25 years?   Swings are okay, but need to end at 65 with a stable portfolio.   Hmm….


High Flying Stock – Projection revisted

Stock is high flying, and my total unvested stock has jumped up to 85K, with 1265 shares to vest.   I end up with about 2/3’s of that (about 56K)… but I also get more each year (20 to 30K).   With a climbing stock price though, the stock vests aren’t quite as valuable at these high levels.    I have only about 13K vested to date, but more is coming…

The cool thing is the vesting is bigger each year until you reach 5 years and things tend to level off.   This year I will vest about 240 shares, next year will be ~50 more.   So when I hit 2020, I will vest 372, and then it will about 300 per year from then on.    So like this through 2020:

Year Pre-Tax Award After Tax Award Approx Value
2016 197 131.3202 $8,798.45
2017 247 164.6502 $11,031.56
2018 292 194.6472 $13,041.36
2019 332 221.3112 $14,827.85
2020 372 247.9752 $16,614.34

That would total to 64K after taxes in stock value after all vesting is done.  That is assuming no additional growth (or loss) in the stock.  With a bit of additional growth up to 71K.   So say +/- 7K for the full vest would be anywhere between 57K to 71K.

Year Pre-Tax Award After Tax Award Approx Stock Value Approx Value
2016 197 131.3202 51 $6,697.33
2017 247 164.6502 67 $11,031.56
2018 292 194.6472 75 $14,598.54
2019 332 221.3112 80 $17,704.90
2020 372 247.9752 85 $21,077.89
 Total $71,110.22

Last part dividends.  Current yield is 2.3%, so about 3K more over through 2020 if I hold.

So in the big picture of things.  This say approximately 71K in 2020 will be used to payoff what’s left of the loan.   I think when I originally projected this a bit higher when I did my big projection, so I’m going to give that math a try again:

Liquid Mortgage Prediction Difference
Now 184533 337790 -153257
2017 200564 321441 -120877
2018 220162 301000 -80838
2019 242866 279808 -36942
2020 268943 257751 11192
2021 291647 234825 56822

This is much closer to reality compared with the prior post.   Still works in the context of a 5 year plan, but this is more tax accurate.   So this is a very optimistic view, but you could get more optimistic quite easily.  This is with instead of 5K added per year , you add 15K per year to the ‘liquid’ account.   That would help reach goal by the end of 2020:

Liquid Mortgage Prediction Difference
Now 184533 337790 -153257
2017 210564 321441 -110877
2018 240162 301000 -60838
2019 272866 279808 -6942
2020 308943 257751 51192
2021 341647 234825 106822

But of course, we should also look at least optimistic.  Stock takes a nose dive, and your unable to save:

Liquid Mortgage Prediction Difference
Now 184533 337790 -153257
2017 195564 321441 -125877
2018 205564 301000 -95436
2019 215564 279808 -64244
2020 225564 257751 -32187
2021 235564 234825 739

We still get there at the end of 2021, and life is good, just not as great.

So one more permutation of this, I could also look at say earning 5%, 10% per year over the next 5 years on existing in each model.  So in the optimistic with 5%:

Liquid Mortgage Prediction Difference
Now $184,533.00 $337,790.00 -$153,257.00
2017 $219,790.65 $321,441.00 -$101,650.35
2018 $260,378.18 $301,000.00 -$40,621.82
2019 $306,101.09 $279,808.00 $26,293.09
2020 $355,197.00 $257,751.00 $97,446.00
2021 $400,919.91 $234,825.00 $166,094.91

And 10%… it’s quite clear if we can get anywhere between this, on the optimistic model, things go REALLY well, and the goal would be achieved in about 2.5 years.   Either of these predictions look really great.

Liquid Mortgage Prediction Difference
Now $184,533.00 $337,790.00 -$153,257.00
2017 $229,017.30 $321,441.00 -$92,423.70
2018 $281,517.03 $301,000.00 -$19,482.97
2019 $342,372.73 $279,808.00 $62,564.73
2020 $406,601.44 $257,751.00 $148,850.44
2021 $467,457.14 $234,825.00 $232,632.14

Down to 134K

My prime metric (Liquid Assets – Mortgage) is down to $134,368.   Thanks to a stock bonus this month things are moving in the right direction.    The optimistic goal for the end of the year is this (from my last post):

Liquid Mortgage Prediction Difference
202533 321441 -118908

Just under liquid goal at 200,269.   About 13K in mortgage needs to be burned off (about 6500 in early principal payments + 6500 in regular mortgage principal).  The outlook is very good.

The outlook is good, but I know I tend to outpace spending during the summer.  Kids camps, vacation(s), etc.    The bonus schedule is good this month (one more at the end of the month), but then cools off till July.  July – October are flush with a sizable bonus each month, then it cools off basically till the end of the year.   Those months are typically the ones I think I should see the largest growth in Net Worth.   So we are in good shape!

We have a 10 year old vehicle that I’m considering replacing, and also the whole doors/windows thing for the house (~15K project).  If we end up ahead, could end up putting some of the money towards those purchases towards the end of the year.

My bonus schedule is roughly (just keeping this here for reference)

  • Jan – Quarterly
  • Feb – Utility, Stock
  • Mar
  • Apr – Quarterly, Stock
  • May
  • Jun
  • July – Quarterly
  • August – Utility, Stock
  • Sept – Merit
  • Oct – Quarterly
  • Nov
  • Dec

THE Projection….

Okay… This is super optimistic, no changes in employment, and no major disasters (or purchases).   This is knocking out 50K of debt per year.   Calculation was done primarily saying, save 5000 + stock vesting sales.    Will revisit it at the end of this year, and future years.

Net here on the first one 253K.

Liquid Mortgage Prediction Difference
Now 184533 333618 -149085
2017 202533 321441 -118908
2018 230351 301000 -70649
2019 263197 279808 -16611
2020 301071 257751 43320
2021 338945 234825 104120

And the less optimistic, 13K fixed per year against the mortgage with the extra 800 dollars of mortgage continued.  Net here is 137K, almost half.


Liquid Mortgage Prediction Difference
Now 184533 333618 -149085
2017 197533 321441 -123908 -25177
2018 210533 301000 -90467 -33441
2019 223533 279808 -56275 -34192
2020 236533 257751 -21218 -35057
2021 223533 234825 -11292 -9926


And the least optimistic version, no additional payments, and saving 5000 a year…  Net here is 54K.   Still would owe 94K at the end of 5 years.  This would my model would look like with either a) a health scare, or b) changed jobs.

Liquid Mortgage Prediction Difference
Now 184533 333618 -149085
2017 189533 327914 -138381
2018 189533 317527 -127994
2019 189533 306731 -117198
2020 189533 295509 -105976
2021 189533 283845 -94312

End of March

Prime Metric:  ~148K (Long term Debt to Liquid Assets)

Prime metric is a bit higher to end the month than last month.  Right now the number lags a bit as I wait for my ESPP to ‘vest; for the quarter.   April should see this number fall to see the prime metric close to or below 140K.   It’s bonus and stock month, which happens ~4 times a year (January, April, December, and August/Sept being the big one).   This is when I typically see the largest fluctuations in Net Worth and my prime metric.

Small challenge as of late, managing the amount of cash I keep in the bank account.  I currently have about 7K in there, but that means that income must keep up with credit card, mortgage, and bill payments.   It’s not so much challenging, but something to keep an eye on.   Don’t need to leave too much in the very low earning cash account, but need to make sure I don’t over drawl when some of my auto-pay stuff comes up.


It’s funny how time seems to march forward much faster now that I’m over 40 with kids.  The dread of years of paying bills and mortgage in my 30’s, has been taken over by a sense of looking forward to a ‘completeness’ with my finances.   I am forever grateful to be financially secure enough to achieve this goal, and know so many struggle with this.    Even if I don’t reach my goals, we’ve built enough of a cushion now to survive in some lean times.

I can see a moment not too far off in the distant future where wealth development entirely outweighs debt payment.   Of course, I imagine this fades to retirement preparation fairly quickly.   Still there is a secure independent feeling of knowing you can own your house outright, have your children’s education payed for, and be semi-prepared for retirement.  I see the light… and it’s not that far down the road that these goals are achievable.  6 Years ago, it seemed 10 or more years away, now it looks 3-5 years away on the current path.   I can see being 45 and being in having most of this taken care of.

My two biggest concerns over the next 5 years are, a) home repairs, and b) auto repairs/purchases.   Doors, windows and roofs are expensive…  Cars are expensive, and we tend to buy on the expensive end.   I know we need to buy some windows, and I keep holding off.

So, in 20 years of saving, investing, purchasing I’ve learned a few lessons.  1) I would be a lot wealthier if I could have stood for a bit more risk, but also became risk adverse early as it was my personality and early losses that influenced this.  2)  Living within your means can’t be overstated.   3)  You must enjoy it some, but that doesn’t mean you shouldn’t do #2.   4)  Solid employment and wages is everything.  You’ll never be uber wealthy this way… but you can be very wealthy and fulfilled as an employee.   Some will say the only true path to wealth is through entrepreneurship…. but that is always quite a risk/reward scenario.