Are Our 401k Projections/Assumptions Correct? 10% Employer 401k Match.
Spouse is 35. Currently starting to fund the 401k. 20k Balance in Vanguard 2055 Target Date Fund. Historical Average is
10.7%.
401k is Employer matched. First 3% is 200% and next 4% is 100% Match. Essentially a 10% total match if employee contributes 7%. If contributing nothing else, it would be 17% of Income (Roth 401k).
1. Currently makes $55,000 per year. 2.5% Annual Increase.
2. She wants to stay with the company, currently in College and should be able to obtain a role in 3 years at about $75,000.
Assuming 10.7% Average growth for 30 years with salary increase to $75,000 at age 38 and 2.5% increase yearly in cost of living, there could be just under $3,000,000 at age 65.
I ran it through multiple calculators. Could it really be accurate?
If so, they would probably "Retire" at age 60 when funds are about 1.7 Million and begin 3% withdrawal. Estimating a 6% conservative growth of the funds when moved to a less risky fund. Even withdrawing 3% the money would continue to grow.
Why only 3%? I am Retired (100% VA Disabled) my income is guaranteed so unless I die we would have my pension. And if I die first they'd qualify for DIC (Dependent Indemnity Care) which doesn't replace my Disability but pays the surviving spouse currently about $1600.
Could it really be that simple? Or am I missing something?
We aren't factoring Social Security either, though I may qualify for SSDI and be taking on that fight shortly.