What do I consider to be stupendeliciously rich?!

Holy cow, this is going to be my longest article ever! I’m proud of it so I hope you enjoy 🙂 The other day I wrote about what type of blog I want Punch Debt to be. I got a fun comment from my homeboy Josh. He wrote…

So Ninja,

I see one day you’d like to be ‘stupendeliciously’ rich, nice word by the way 🙂 You also have an action plan to make it happen. How much do you consider is enough? And once you make your Bill Gates like fortune do you just plan to retire early, or you got something else in mind?

Great question Mr. Josh. Everyone has there own definition of the word “wealthy.” For some it might be just enough to pay the bills without having to worry about overdraft fees. For others, it might be the ability to retire and live a comfortable life, for others it might mean gettin’ all Bill Gatesy and making a couple billion each year. Everyone should have goals established for what they want to achieve financially in their life.

To respond to Josh’s first question “How much do I think is enough.” I will be able to rest easy at night when I know that I could lose my job at age 65 and be able to live off my savings until I die at age 123 (that’s right suckas I’m going to outlive my grandkids!). I will know all my hard work has paid off when my annual retirement contributions don’t really affect my overall balance because it is too freakin huge to notice an extra $10k to $20K addition each year. I never want to have to depend on “someone” else to get by in life. I refuse to be that 60 year old cat lady that lives with her children because she can’t afford to live in her own place. I don’t want to be in a position where I am unemployed long enough that I need to collect funding from the government. I want to have enough money in my accounts that the stock market dropping a crazy 50% in one year doesn’t really affect me that much. Those are the things that matter to me, and what I consider “enough”.

I’m gonna quit the vague terminology and throw out my personal retirement goals. By the time I am 65 I plan to have $6.1 million in my retirement accounts. Wanna know how?

Here is my income prediction: In my position with the govt, I will make $70K a year starting at age 25 (I made 40K at 22, now 50K at 23, 60K at 24, etc). Once I reach the $70K my income growth becomes severely limited. I assumed I would make $70K for the rest of my life with a 3% increase each year for inflation. I personally believe my income will go up beyond the $70K as I gain more experience and am able to transition into a career field with a higher potential income, but I like to play things safe so I stuck with more conservative numbers. I then approximated my wife’s income to be $50K a year for eight years with no pay increases. I anticipate my wife will quit working at around 30 so she can be a stay at home mom. She will only contribute to her Roth IRA and 401K accounts during the years in which she works.

My Roth IRA prediction: I currently have $8K in my Roth IRA and I plan to make maximum annual contributions from age 23 to 65 with a rate of return of 8%, to adjust for inflation. I should have $1.87 million waiting for me in my account come age 65.

Wife’s Roth IRA: The Wifey will make maximum annual contributions for eight years with an expected rate of return of 8% as well. This brings her account balance to $700K by the time she turns 65.

My 401K: I currently have $4K in my 401K. I plan to continue making 8% contributions to my 401K through retirement. The government matches the first 5%. Making $70K (plus 3% inflation raises) from age 25 to age 65, my account balance will reach approximately $2.78 Million come retirement time.

Wife 401K: The wifezilla will make 5% contributions from her $50K annual salary for 8 years. Her employer will match 5%. This leaves her account at $817K by her 65th b-day.

Between the two of us, we should have about six million waiting for us to use and abuse. Now some of you haterz out there are going to ridicule my numbers and say that I could lose my job, or have a significant financial issue come up, or even worse I could end up divorced. Let’s say you are right and my numbers are cut in half. Even then I’ll still have a couple million waiting to hang out with me. Don’t bring your negative energy around here, I don’t need it….constructive criticism is always welcome though 🙂

As for what I plan to do in retirement…Whatever the eff I want! I’ll probably still work part time and let the majority of my money continue to grow. I plan to give the majority of it away to organizations and causes I believe in. Think about how fun it would be to drop $30K to a youth group so they could take inner-city school kids to summer camp for free! It’s things like that, that motivate me to save now so I will not only benefit, but can share the love with those around me. I’m not gonna lie though, I’ll probably buy a few houses and maybe and a fighter jet or something else bada$$ 😉

So bloggers, bringing it back to you now. What do you think? Am I crazy? How much do you think you’ll have? What measures are you taking to get there?