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June 26, 2007


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It seems like setting a number might be kind of pointless as your number will constantly be changing due to inflation. For instance, right now my number could be $1.2 million, but given the effects of inflation, I might need a lot more in 20 years or so.

@ Alex - It's not too difficult to adjust your number for inflation. If you google "future value formula" or if you know how to solve for FV on a financial calculator, you can do it.

The FV of $1.2mm in 20 years at an inflation rate of 3% is $2.2mm.

This is not, of course, to say that figuring out what the number should be to begin with is easy - it's not!

I have a target, but I am constantly revising that target as new info roles in. Making assumptions about how much I will need to withdraw annually, and how long the money will last is hard. Even the experts have big disagreements on how to go about estimating. I have a fin'l planner to help me and even her numbers are suspect, because I think it's to her advantage to be very conservative. Of course, she always rebuffs me by saying, she'd rather save too much than too little - That will usually shut me up.

Wow. And I thought I had a big number at 20X my salary. I think you're at 25X, based on what I read in your posts.

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