How Much Money Do I Need to Retire? or What’s My Number? Part 10
We have arrived! We will now complete YOUR financial template and define YOUR NUMBER!
Defining YOUR NUMBER
Today, we are going to define YOUR NUMBER and complete YOUR financial template. Is this exciting or what? After today’s post, we’ll summarize next week and then move on to discussing professional goals.
We continued considering additional “things you should know” in our series “How much do I need to retire or what’s MY NUMBER part 9.” Some of this introduction is repeated for consistency.
Yes, I know, this series of 10 posts that summarized what you needed to know to define your number may not have been the most interesting ones you have read; however, we all know there are important things we must do that may not be that fun and exciting. Like homework and practice for whatever you are attempting to get better at; be it sports, music or whatever. It’s often the hard work done in private that is the key to achieving high performance and excellent results. We all know this already. Remember the post titled “The 10,000 Rule” from August 5, 2025? Determining how much money you need to last you the rest of your life is not something you want to approach casually. Remember that for most people, the amount of money they have to carry them through the rest of their lives is what they have on the day they retire, and for most folks, that number came with little advance planning. It’s often what I call the difference between surviving and thriving. And that’s why I’ve spent so much time getting here, because it’s crucial if you want to achieve your dreams and live your best life!
We’ve made a “first pass” at trying to determine “YOUR NUMBER” a while back. Depending on where you are in life at this time and how complicated your financial goals are, you may already have been able to do that. Or let me say, you may have thought you had it. Because, you see, it’s not about just getting to the end, but about enjoying the ride and ensuring we are adequately protected along the way. Today, sixteen months of effort come to fruition. After today, you will have defined YOUR NUMBER and completed YOUR financial template. So, I’ll assume at this point you have identified YOUR NUMBER, and we can move on to completing the template and, thus, your lifetime financial plan!
Remember, in some of my first posts, I mentioned how less than 3% of the population has written goals? If you’ve been not only following me but doing the work in the process, you are now one of those people. Welcome to the 3% club! Our next goal for you is to join the 1% club, and that’s where it really gets exciting!
Completing the financial template
We are going to review how the financial template is constructed, then fill it in, and at the end of this post, ideally, you will have a completed financial template. Let’s dig in. Perhaps you want to reconstruct the template as we go, and if so, then pull out a sheet or sheets of paper, and let’s begin.
Across the top of the paper, starting from the top left, you will have a series of columns. Remember, these are the ones I use, and yours may be a bit different. Here they are: Time Period, Date, Current Investment Value, Projected Annual Contribution, Actual Contribution, Projected Total Investment Value, Savings, Expenses, Delta, Action Steps Required to Get/Stay on Track, Other Remarks or comments.
Let’s now complete each column. It will be in draft form, so don’t worry about it being neat; you can rewrite it later:
Time Period: Place today’s date in the top left, directly under the title. As we’ve been working toward this point in our financial journey, we’ve been concerned by the cells titled “Retirement” and “YOUR NUMBER,” and we have been working backwards from those two entries. So, about ¾ down the page, write “Retirement.” Depending upon the difference between today and your retirement date, add the following, starting under today’s date: 6 months, 1 year, 3 years, 5 years, 10 years, 20 years, 30 years, 40 years, Retirement, +1 year, +5 years, +10 years, +20 years, +30 years. Maybe, if you are in your 20s or in the FIRE program, you will have +40 years. Note: You can add additional dates or subtract dates as you wish. These are what worked for me. Over time, if you are really motivated, you can insert the dates of your twice-a-year review period and really track things closely.
Date: Add the dates to the date column, beginning with today’s date. Stop and ponder these two columns for a moment. The date in the retirement column looks to be a long way away, doesn’t it? Let me just say that it’s closer than you think and by completing this exercise, and doing the work over time, when you get to that day it truly will be one of celebration.
Current Investment Value: This is only the total of what you have in long-term investments that you are saving toward retirement, such as a 401(k), 503(b), or IRA. Most of these investments are in either tax-deferred or, even better, tax-exempt (Roth) accounts. You could have real estate or other investments that will make up your total net worth and generate income for you. The reason for this is that while your primary home is part of your total net worth, you likely won’t be using it to generate income. You may have some taxable accounts depending upon how you structure your investments. Not included in this column will be the value of your home or any other investment accounts, such as 529 college accounts for your children or grandchildren. The amount listed in this column is for you and your immediate family only. List the amount you have today in the date column next to today’s date. From today forward, you will only complete this column when you reach the milestones listed in the date column, and the amount will be the actual investment level at that time.
Projected Annual Contribution: This is the amount you need to contribute on an annual basis to get to YOUR NUMBER on the date you desire. This amount IS PROBABLY NOT, but MAY BE, what you ARE currently contributing today or what you think you can afford, but the actual amount needed to reach YOUR NUMBER in the timeframe you have available. Let me state that in simple terms: What you are contributing toward your retirement today may not be what you need to be contributing to reach your financial goals. Completing this column may be the first time you discover you have a conflict (in that you may not be contributing enough), and it may cause you to rethink many of the things you have been doing or how you have been doing them up to this point in your life. It may require you to increase your income, which may mean a job change, increasing your education or training level to make more money in your current position, or any one of many actions. Remember when we spoke of disruptive innovation (Note 1)? Remember when we spoke of tempering your goals? This may be the first time you're exposed to tempering your goals or facing a situation where you may not reach YOUR NUMBER on your current path. You may need a drastic change from your current path. I hope this is not a surprise to you, as I’ve been working hard to prepare you for this moment. You may need a financial advisor to help you, or you may choose to use a tool like an online calculator. I prefer you to have your own advisor who can walk with you during this journey and guide you. Remember that I took this journey on my own, so it’s not impossible; you may just have to do a lot of work to learn all you can.
Actual Contribution: This column is so you can see at a glance if you are on track to meet your goal. Ideally, you run a little ahead of the contributions you need to make, so when you hope to reach your number, you do so a bit sooner. “Well, jeez, Dave,” you say, “It’s already hard enough and you want me to do MORE???” The short answer is yes, and here’s why: Remember discussions in the past about WHEN you will be out of work or IF AND WHEN you are forced into retirement early? Being ahead on your investments and ensuring you have an adequate emergency fund will protect you WHEN, not if, any or all of those things happen. In reality, what will likely happen is that, over time, as you make more money, you can contribute more. You must be very careful about lifestyle creep and keeping up with the Jones family. Sure, you deserve a reward when your efforts pay off, just be reasonable about it. This column is a quick indicator for you.
Projected Total Investment Value: You will need to complete this column completely from today until Retirement +30. You can tell if you are on track by comparing this column to your Current Investment Value column as time progresses. Remember that the Current Investment Value column is completed over time as you reach the dates in the column to the left of it. A word of caution is in order at this point. Each cell in the Projected Total Investment Value column will be an IDEAL amount, and probably not an ACTUAL amount. There are two reasons why. One is that as we complete our projections, we typically do so in a linear fashion, projecting that things will rise at a steady pace over time. As we’ve discussed before, this isn't how it normally happens. And the second reason, closely related to the first, is that the investment level curve likely will increase its angle as you get closer to retirement. What that means is that it is likely the amount in your Current Investment Value column will be behind the amount shown in the Projected Total Investment Value early in your financial journey. I want to make sure you understand why this is. Do you? I would prefer that these two columns match over time, but that’s not typical for most people. If you can do that, then congratulations to you, and you are better prepared should problems occur later in your life. Don’t fret over these values being different; understand why it is this way. If possible, contribute more and help close this gap.
Savings: This would be additional savings outside of your investment account such as a rainy day fund or simply money you may have in a credit union or bank savings account. Don’t include any money you have in a checking account, as this is used for day-to-day expenses. Notice that none of these accounts go toward YOUR NUMBER. I consider these operating funds and you likely will always keep these accounts active and outside of your investment accounts. The only reason this column is included in my spreadsheet is so I can see all of my cash, stock or other investment assets at a glance. If you don’t want this column or don’t want to use it, then that’s fine.
Expenses: This is another optional column if you want to use it. The purpose of the financial template is to manage long-term investments, not really as a budget tool. I’ve never used this column, but if you find yourself spending more than your income minus your expenses and dedicated savings/investments, then there is an issue that needs to be addressed, and you may want to use this column for a while to keep it front and center.
Delta: A delta is a difference between two items. In this case, it is a difference between your Projected Total Investment and your Current Investment Value. This will allow you to see if you are on track. Remember what I said earlier: because our investment level is not linear, you may find yourself behind in your early years. It’s OK, so long as you are projected to catch back up as you get older and your investments actually do catch up. Where this becomes a problem is that as you get closer to retirement age (whatever age you determine it to be), you should start tracking very closely between these two columns. Also, we have to be aware of whether something happens and we are forced into retirement early. Note: We may occasionally receive a windfall. A windfall is defined as an unexpected good fortune and is typically understood as a large sum of money. This could come in the form of a year-end bonus, stock options or grants, an inheritance, a gift, or other forms. Consider using any windfall you receive to either catch up or pad your long-term investments. How people spend windfalls tells a lot about them and their values, doesn’t it?
Action Required to get/stay on track: If you’ve done a good job determining your plan to the proper level of detail, then this column could remain blank. You may find yourself behind at times due to normal market corrections and again, no action is needed. However, if you need to make major life changes or course correct, it is here you will list those actions. RESIST THE TEMPTATION TO GLOSS OVER THIS COLUMN WHEN THINGS DON’T GO AS PLANNED. When things get off track, that’s where the grit, determination, and persistence come into play, and this column is how you hold yourself accountable.
Other Remarks or Comments: Use this column for whatever you need to, typically for comments of some kind.
If you get stuck…
OK, so this may have been a difficult exercise, but I believe if you look at all of the past posts, you will find you have all of the information you need. However, let me mention one thing. If you are stuck…And you can’t quite fit it all in there, then the thing to do is…Use the priority matrix to prioritize all of your goals. We all have a lot we want to do, and sometimes we can’t do it all. The priority matrix forces us to rank all of our wants and needs so that the most important get done.
Whew!
One final comment before we summarize next week and move on from financial goals. The purpose of this document, your Financial Goals Template, is to track your investments and plan for financial freedom. It is not a document designed to show your total net worth. That said, the Financial Goals Template is a helpful document for determining your total net worth. Besides financial investments, your total net worth includes items such as your home, autos, personal effects, and life insurance polices that are not listed here. Neither are there any debts you may have, which must be subtracted from and reduce your total net worth. Finally, you may have other income-producing assets, such as rental property, that you count as income. The value of the real estate is not shown, but the income is accounted for on the template. You probably get the idea that determining your total net worth will require a separate document.
Summary for today
If you were able to complete your Financial Goals Template today, congratulations, you really have accomplished something. If not, then try to do it as soon as possible. I strongly advise NOT TO delay completing this document. If completing the document made you feel bad about your current situation or depressed, maybe take a break and come back to it. Remember previous conversations about coming back from the losers’ bracket? It can be done if you really want it badly enough. I know, I did.
At this point, the value of the course and/or the book is really starting to show. It’s not too late to take the course or buy the book, as all it will do is reinforce what you have learned here and maybe give some different details and examples. I suggest doing that; the cost is minimal, especially in the big picture of your lifetime financial journey. Remember that I am available to assist if needed, so be sure to reach out to me via the email listed on the website.
That’s all for this week!
How Much Money Do I Need To Retire? Part 10
Afterburner Success Partners
What’s in it for me?
We all want financial security, don’t we? Rather than leave it to chance, let’s get on a path so we can know for certain! And that’s what’s in it for you this week!
Call to Action
Have you completed your financial template? If not, do you need more time or do you need help? If you need more time, then be sure to take that. If you need professional help from a financial advisor or tax professional, then seek that as well. If you would like to work with me one-on-one, that is also a viable option. In any case, take action today!
Recommended Resources
Your financial professional, tax advisor, accountant, mentor, or family are all resources available to you. If you’re interested in working with me, please don't hesitate to let me know. Throughout the course, I use various media to motivate students to succeed. I’m going to recommend one that I usually show toward the end of the class now. Click on the link in Note 1. What are you going to do with what you have?
Up Next
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Notes
Please note that as an Amazon Affiliate, I may earn a small commission on the sale of any of these recommended resources.
1. What is Disruptive Innovation? Harvard Business Review: https://hbr.org/2015/12/what-is-disruptive-innovation