Math formula / Retirement question ?

Question

Math formula / Retirement question

What is the equation to figure this out :

If in 2030 (22 years from now) I would be receiving a gross retirement of $6800 a month at my current rate of savings adjusted for 22 years of inflation. How much would that equal in today (2008) money.

I am trying to figure out if I am saving enough or if I need to adjust the amount going into my retirement account. I currently put in what would equal 17% of my base pay. The above amount also does not include what I would get from social security or other investments I have made just what I would be getting from my employer ( 1% per year of my base pay + what I have put into the company 401K type account).

Answer 1

It depends on the rate of inflation they are using to estimate and they could be incorrect in that calculation. If you can save and invest more without undue strain on your current finances, do it. You never know what unexpected expenses, health issues or economic factors could influence how much money you will need in retirement.

BTW, it sounds like you are in better shape for retirement than many. Congratulations!  

Answer 2

Use this Present Value calculator http://www.investopedia.com/calculator/P...

Need to assume a discount rate, or inflation in your case.  5-6% is a safe bet.

Time period of 22 years.

Future value is your expected annual payment.

Best wishes.