Originally Posted by bizaro86
I truly believe people would save more if they understood compound interest.
Age Earnings Savings Interest Nest Egg
22 $31,500 $3,150 $- $3,150
23 $32,445 $3,245 $252 $3,497
24 $33,418 $3,342 $280 $7,118
25 $34,421 $3,442 $569 $11,130
26 $35,454 $3,545 $890 $15,565
27 $36,517 $3,652 $1,245 $20,462
28 $37,613 $3,761 $1,637 $25,860
29 $38,741 $3,874 $2,069 $31,803
30 $39,903 $3,990 $2,544 $38,338
31 $41,100 $4,110 $3,067 $45,515
32 $42,333 $4,233 $3,641 $53,390
33 $43,603 $4,360 $4,271 $62,021
34 $44,911 $4,491 $4,962 $71,474
35 $46,259 $4,626 $5,718 $81,818
36 $47,647 $4,765 $6,545 $93,128
37 $49,076 $4,908 $7,450 $105,486
38 $50,548 $5,055 $8,439 $118,979
39 $52,065 $5,206 $9,518 $133,704
40 $53,627 $5,363 $10,696 $149,763
41 $55,235 $5,524 $11,981 $167,268
42 $56,893 $5,689 $13,381 $186,339
43 $58,599 $5,860 $14,907 $207,106
44 $60,357 $6,036 $16,568 $229,710
45 $62,168 $6,217 $18,377 $254,303
46 $64,033 $6,403 $20,344 $281,051
47 $65,954 $6,595 $22,484 $310,130
48 $67,933 $6,793 $24,810 $341,734
49 $69,971 $6,997 $27,339 $376,070
50 $72,070 $7,207 $30,086 $413,362
51 $74,232 $7,423 $33,069 $453,854
52 $76,459 $7,646 $36,308 $497,809
53 $78,753 $7,875 $39,825 $545,509
54 $81,115 $8,112 $43,641 $597,261
55 $83,549 $8,355 $47,781 $653,397
56 $86,055 $8,606 $52,272 $714,274
57 $88,637 $8,864 $57,142 $780,279
58 $91,296 $9,130 $62,422 $851,831
59 $94,035 $9,403 $68,147 $929,381
60 $96,856 $9,686 $74,351 $1,013,417
Hopefully the table will format, but it shows what saving 10% of your income will do. I started the income at $31,500 at age 22 right out of school, or $15.75/hour for one person working full time. Not exactly 1%. I assumed a 3% raise every year, which gets you close to the median family income in Alberta by retirement at age 60. The family in this example never earns more than the median family income in AB, so again, not 1%. If they save 10% of their income and earn 8% return, that ends at over $1MM, which if you can pay off a house would allow for a more than comfortable lifestyle, imo.
Maybe you don't like 8% as an assumption. If you don't, I had to extend out to age 66 to get to $1MM at 6% returns. However, at 67 your OAS kicks in, and you could start taking CPP as well, so the $1MM would go further.
I didn't have to assume someone gave you $$, but I did have to assume diligent savings from day 1. On the other hand, if you set it up automatically every paycheck, you miss it a lot less.
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