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How Much Do You Have To Save To Have One Less Year of Work?



 “More men are killed by overwork than the importance of this world justifies.”

--Rudyard Kipling

 “The best time to start thinking about your retirement is before the boss does.”


All too often, people plan for their retirements using a vague notion of some time in the future and some system that will take care of them. They plan to work until age 65 and hope that Social Security or a pension will take care of their needs. What happens, though, when we take a point in time, such as age 65, and start working backwards? In the financial planning process, we typically figure out how much income you’ll need at a given retirement age, account for inflation, since a dollar today won’t buy as much in the future, estimate an earnings rate on investments, and calculate how much you’ll need to save to get to a point where you’ll have enough money to provide your needed income.

Let’s take a hypothetical example. Say Bob is 45 years old, has $250,000 saved, and wants to retire at the end of the year that he turns age 65 and will need $50,000 a year in today’s dollars. He expects to get $20,000 in Social Security and anticipates living to age 90. Since Social Security is indexed to inflation, he’ll need $30,000 a year in today’s dollars to maintain the expected standard of living, and he wants to leave $200,000 in his estate. For simplicity’s sake, let’s assume a constant 3% inflation rate and that his investments earn 5%.

In 20 years, because of inflation, he’ll need his investments to provide $54,183.34 a year – that’s the equivalent of $30,000 in today’s dollars. Then, he’ll spend down and, assumedly, not add more to his investments. Therefore, to hit his target, he’ll need to save $13,273.68 until he reaches age 65.

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Jason Hull is a Fort Worth fee only, hourly financial planner who serves clients in Fort Worth, TX and Dallas, TX as well as serving clients nationwide.

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Hull Financial Planning is a Fort Worth, fee-only hourly financial advisor. The cities we serve in the Dallas-Fort Worth area include: 

Tarrant County: 
Arlington, Azle, Bedford, Benbrook, Blue Mound, Burleson, Colleyville, Crowley, Dalworthington Gardens, Edgecliff Village, Euless, Everman, Flower Mound, Forest Hill, Fort Worth, Grapevine, Grand Prairie, Haltom City, Haslet, Hurst, Keller, Kennedale, Lake Worth, Lakeside, Mansfield, Newark, North Richland Hills, Pantego, Pelican Bay, Rendon, Richland Hills, River Oaks, Saginaw, Sansom Park, Southlake, Trophy Club, Watauga, Westlake, Westover Hills, Westworth Village, and, White Settlement 

Dallas County: 
Addison, Balch Springs, Cedar Hill, Carrollton, Cockrell Hill, Combine, Coppell, Dallas, DeSoto, Duncanville, Farmers Branch, Ferris, Garland, Glenn Heights, Grand Prairie, Grapevine, Highland Park, Hutchins, Irving, Lancaster, Lewisville, Mesquite, Ovilla, Richardson, Rowlett, Sachse, Sand Branch, Seagoville, Sunnyvale, University Park, Wilmer, and, Wylie 

We also serve clients nationwide and can leverage technology to maintain our client contact and communication.


Hull Financial Planning, 2939 Crockett St. #315, Fort Worth TX 76107, (817)476-0584

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