A few calculations

How long before retiring, how much to save ?

Two crucial questions that a bit of spreadsheet magic can help answering…
Let say you start work at 25, with 35KE p/a, free of debt, and ten year later you manage to get paid 45KE p/a
Your budget on average might look like this:


Then we need to set the compounding part of the model (my favourite part):


So, a bit of compounding later, we end up with the following:

at 39% saving rate based on the budget aforementioned, provided your salary moves up to 45 KE in the first ten years, you will in theory need 17 years of work to retire on a 1500 Euros income at 42 years of age, which is still relatively young…simulation-settings-v2

42 compared to 65 which is normally regarded as the regular retirement age is already a tremendous gain of more than 20 years lifetime . But we are not there yet if we consider the retirement champions who retired still in their thirties like MMM (him again).

All this Excel modeling is my one of my ways to put my computer to work for me.