I currently make $150,000 per year. I am 45 and want to retire in 20 years.?

I want the same standard of living. This means that I want to have the same post savings income after retirement that I have before. I have nothing saved.

I will not earn any income after I retire except investment income. Assume that Social security will be bankrupt and I will receive nothing. Ignore health care costs....

Ignoring taxes, what percent of my income should I be saving while I work if I assume that inflation is 3% and my return on investment is 8 percent. I expect to live until I'm 95.

Please show your work and assumptions.

1. No, it is not my homework.
2. I'm happily married with a 3 yo.
3. I'm really 49.
4. I make more than that.
5. I have some savings but will factor it in on my own.
6. Yes I can figure it out but - Why can't you ??

I just have one question for you, are you single? lol =)

I was actually just reading an article on this on yahoo's front page. Here is a link, maybe this will help, http://biz.yahoo.com/hmoney/071106/11060...

I know that is really for the future, but yahoo finance always helps me out when i have questions like this, maybe take a look there. sorry
one more question: Why didnt you ever set anything up when you were younger?

do your own homework, you won't learn by having others do it for you.

I dont know but if you make 150,000 a year.... will you marry me?

your going to be old allready

My crystal ball tells me that you're not really making $150,000. It tells me that you're a student with finance homework. It tells me not to help you. People who make $150,000 can figure this stuff out for themselves.

150K and you haven't saved anything?
If you can't save anything while you earn that kind of money, there's nothing we can do for you, besides.. if you're smart enough to make that money, you should be smart enough to plan your finances out.

Thank you for making my day. I worked for the same company for 22 years. Never made more than $30,000 in a year. No retirement plan, IRA, or 401k. Yet I retired at the age of 50. Own two homes, one is a summer home in Colorado. Live quite comfortably on investments and stock trading. Have enough money in the bank to never have to worry about how much I spend or save.

It makes my day to see rich folks whine about not having enough money. I must say that retirement is great. I suppose that you'll have to wait 20 years to find out though, too bad.

well, this is an interesting calculation.

First the assumptions, real return is 5% after inflation. Going to assume that whatever your final savings is, to last 30 years in retirement, you're going to have to take out about 5% (most financial institutions are recommending 4% to be conservative).

So, roughly speaking in today's dollars, you'll need almost 3 million to generate $150k. To get to 3 million in 20 years requires a yearly contribution of over 80,000 per year (which is really unrealistic). At 5% real rate of return, at the end of 20 years, you'll have $2,777, 540. At a 5% disbursement rate, it'll generate $138,877 a year.

Now if your child goes to college, you will need to save for that as well. Fortunately, you've planned your retirement for after they graduate (assuming they do not go to grad school) from college.

The good news is that if you are able to save $80,000 per year, you'll probably not need $150,000 a year (in today's dollars) to live on since you will have learned to live on less than 1/2 of that. Also, I think current predictions are that Social Security will run out in 2040, so you might get SS for a number of years before it runs dry. If you own a home, there is another possible source of income and there might be the possibility of inheritance in your future as well.

I'll have to admit that I was pretty astounded at the amount of money you'd need to save to achieve this. One of the strategies that I've done is to start Roth IRA's when my children were 16 and then I would contribute to them (based on their income for the year) and invest them in mutual funds. If I do this for a few years, it should be a tidy sum by the time they hit retirement.