Hitting Your Target

The article in "Business 2.0" turned out to be an advertisement disguised as an article, but I think it is still useful. Here are the five tips for coming up with a rough estimate for what you'll need to retire:

1. Take a Financial Snapshot:
Add up everything—from the grocery bill to insurance premiums—to calculate your current cost of living.
2. Look Ahead:
Your travel costs may increase but housing and clothing costs may shrink. So be specific in estimating future costs, recognizing that inflation will take a big bite.
3. Go Long:
At age 65, your average life expectancy is 83, according to government statistics. Keep in mind you still have a good chance of beating the averages.
4. Do the Math:
Figure out what you've got now, estimate future savings, and calculate how that nest egg might grow using a conservative rate of return. Then add in other sources of income like pensions and social security.
5. Check the Numbers:
If you're well below your target, adjust the equation by boosting savings, delaying retirement, continuing part-time work, or trimming your lifestyle.

This should take me a while to calculate, but I will post each step as I complete it.