Considering 1000 per month in expenses, 300000 come out to only 25 years
I hate to freak you out even more, but I think even that is very optimistic, unless you happen to have a pension plan (maybe you mentioned this earlier; I haven't taken the time to read back all the way). As I think others have pointed out, one thing you may be missing in your calculations is taxes; another is inflation. Even if your investments are growing, inflation will eat away at them; it sounded like you said your retirement savings interest is "guaranteed" which to me means these are really savings, not investments, and they'll probably barely keep pace with inflation, right?
What I mean with the "guaranteed" was that I have the 7k for retirement. That's what it's earmarked for... that 7k is guarantted money in my retirement vs. the speculative... I use it to pay down my debt early and pay myself interest for using that money. If my paycheck shrinks becasue of the fiscal cliff then I may not be able to pay down debt early because I'll have less to work with.
I do have a pension plan at work and I spent 3 hours last night pouring over almost 7 years of pay sheets and inputting that info into a spreadsheet. I really hate my job, but now Im gonna tough it out. My retirement is looking a little better with these numbers.
If you have a pension plan, and your retirement savings are just to tide you over until that kicks in and/or to supplement that income plus whatever you get from social security, $300,000 may be all you need. But if you're really planning to retire in your 50s and live entirely off your retirement savings for the rest of your life, you're going to need an awful lot more than $300,000.
Agreed..... but here's something else to consider. Not only am I in the process of paying down debt, but I am also in the process of going back to a simplier time. By the time I retire I'll be growing around 85% of what I eat and I'll have a solar array for power. No mortgage, no car payment, and no debt. I really won't need a lot of dough to live on.
When I did these calculations for my own situation, I figured $250,000 might last me 8 to 9 years, considering that income taxes will be taken from those funds when I withdraw them, and that my cost of living will be higher due to inflation. I factored in Social Security and the fact that I will no longer be paying a mortgage. We live frugally so we don't need a big income to maintain our current lifestyle; we're also willing to cut back. And we could give ourselves a few more years if we sell our house when we're retired and move into a smaller place in a cheaper location. We'd rather not do that unless we have to. I figured we'll probably have to keep working until our early 70s, at least part-time, based on what I've set aside for retirement to date and what I plan to contribute over the next 10 years or so.
I honestly don't think Social Security will be around when I retire. I'm just giving the govt free money on that one because they wont let me stop.