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A Simple Table to Visualize Your Number of Years to Retirement

It's usually not easy for you to visualize how far away are you from your retirement goals.


Hence, I thought of putting some simple data into a table for easy visualisation.


For context, here are a few assumptions about retirement.

  1. Retirement here represents having a portfolio which can generate 4% annual returns which can cover your annual expenses

  2. You are starting with 0 value in your portfolio now.


Here is the table.


The vertical axis represents the savings rate (%). I choose a range which fits the majority of the population. If you are saving 0%, you will never be able to retire. If you are saving 100%, you are already retired.


The horizontal axis represents the annual investment returns after inflation (%). Again, I choose a range which fits the majority of the population. Most retail investors should be having annual returns in the range of 5-12% after inflation.


The number in the box represents the number of years to retirement. If you are having a savings rate of 50% and could generate a 7% annual return after inflation, you are looking at 15 years more to your retirement. Number of years is generated using Networthify.


I think this table helps to give you a good visualisation on how far or near you are away from retirement.


There are also a few key takeaways just from looking at this table.


  1. If you can reach a high savings rate of 80%, investment returns hardly matter. But the truth is very few of us can have such a high savings rate. This is probably why LeanFIRE is desirable for some as it gives you the control to retire early (w/o relying on the market) as long as you control your spendings well.

  2. Increasing your savings rate is key to retiring early. If you are having substantial pay rises over the years and do not give in to lifestyle creep, you will definitely increase your savings rate which allows you to retire early. The reason why some high earners could not retire early is due to their savings rate. If you are only saving 20% of your income, you will take at least 20 years to retire even at an annual investment return rate of 12% after inflation.

  3. If you are a fresh graduate who can constantly save at least 50% of your income, you will retire well before 50 years old if your annual investment returns after inflation is at least 5%. Well, that is also of course with the assumption that you continue to keep to this savings rate throughout your career.


I did a similar blog post in March but I just thought that putting the number of years to retirement in a table like this help most people to visualize better how many more working years they will need before they reach their retirement goals.


Some of you might be thinking what the number will look like if you already start building your portfolio. After all, this table is meant for people who have zero value in their portfolio. If this is your concern, I encourage you to use Networthify to work out the number of years. You could change various parameters such as safe withdrawal rate, current portfolio value etc and that should help you.


My annual investment return since 2020 has been around 9%. Given that the average inflation in Singapore for the past 3-4 years has been 3%, I can assume my annual investment return after inflation should be 6%.


It seems like I need to definitely increase my savings rate to have any chance of an early retirement.


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