Originally Posted by

**Soriak**
Actually, my calculations take into account inflation - they're all with real contributions and real withdrawals (i.e. your withdrawal amount increases every year). The rate of inflation I take (4.13%) is the median rate of inflation over any 35 year period since 1916. Similarly you get the real rate of return for the S&P500 at 6.76% (nominally around 11%).

The easy way to do it is to use Fisher's equation to transform nominal interests into real interests. Then you've got everything in real terms. Let i be the nominal interest rate, r be the real interest rate, and pi be inflation. Then (1+i)(1+pi)=(1+r) - plug in 0.0413 for pi, your expected nominal rate of return, and solve for r.

See attached excel file.

You first enter the values below PV - the monthly rate of return you expect (annual/12), the number of periods in retirement (years*12), and how much you want per month (pmt) - negative for a payout, but the sign doesn't really matter. This tells you how much money you need by retirement.

Then you do it similarly for the values below FV, except this is from today until you plan to retire. Enter for PV your current savings - e.g. 500k. Then, make sure the solver plugin in excel is enabled. Have it solve for the FV equal to what you got for the PV below by adjusting the pmt variable. That will tell you how much to stash away per month.

With $500k stashed away, you'd have to save $23,200 per month for the next 6 years.

edit: just to be clear... this is very sensitive to the assumptions you make about the rates of return. Usually, it pays off to be much more conservative. 100% stocks 6 years before retirement is a bad idea, and these returns are unlikely to manifest over the short term. However, if you don't make aggressive estimates, your likelihood of getting there approach zero. In any case, you have to make some assumption to get a figure. Feel free to adjust as desired.