If people knew what the future holds, retirement planning would be easy.  Unfortunately, because nobody knows what the future will bring, retirement planning has been a balance between saving enough for the future and not saving too much for the future.  While saving is a good thing, it comes with the price of lower present consumption.  For example, if you earned $100 today, you could spend that $100 today living like a king.  But, then you would have no money tomorrow for basic necessities.  Conversely, you could save all $100 for tomorrow.  That would mean that you wouldn't be able to buy basic necessities for today.  Thus, the balance would be to save enough for tomorrow so that you can live tomorrow as comfortably as you can today.  If you knew that you could earn $100 every other day, for the rest of your life, then it would be easy - spend $50 today, and save $50 for tomorrow.  Unfortunately, you might be able to earn $100 (or more) every day for the rest of your life, or this $100 may be the only money you ever earn for the rest of your life.  Nobody knows.  The best compromise we have is to estimate what we can realistically expect to earn, how long we plan to live, and how much we should be able to spend each year based on those factors.

This retirement plan doesn't really account for catastrophic calamities.  With catastrophic calamities, I don't think any amount of money would be enough.  The end would come swiftly.  Then, it would be game over.

Given that I don't encounter any of those unfortunate circumstances (which if it happens, then it happens), the following are some rough figures - the maximum I can hope to save, as well as a realistic estimate of annual spending.

If I retire at 65, that gives me 35 years (from now) to save.  To have a 2 million dollar nest egg in 30 years (leaving 5 years as a buffer for unexpected circumstances, such as unemployment), I would have to save $66,666.67 per year.  Milestones would be having $666k in the bank in 10 years (when I'm 40), $1,333k in the bank in 20 years (when I'm 50), and $2 million in the bank in 30 years (when I'm 60).  While, this wouldn't be impossible, it would require some very strict discipline (and a high and stable income).

On the other hand, I estimate my monthly expenses to be around $1,100 - broken down into the following: $200 for water and electricity, $100 for internet, $100 for cell phone service, $200 for gas, and $500 for food.  Annually, I estimate $7k total for the following: $5k in property taxes, $1k in home insurance, $1k in car insurance and maintenance.  Total expenses per year would come out to around $20,200.

In order for me to be able to have my cake and eat it too, I would have to make at least $86,866.67 (after tax) every year for 30 years, and not spend any money on anything unaccounted for.  Given that, then by the time I'm 60, I can retire, and expect to be able to maintain my current standard of living for the next 99 years, to exhaust my savings, or for an infinite amount of time if I can invest the $2 million in something that can generate at least a 1.01% return.

This would be an ideal scenario.  Of course, I don't expect my life to turn out this way - it's a bit too idealistic.  But, it is possible.  Not probable, though.  However, it gives me hope knowing that life isn't so difficult as to require extreme and prolonged austerity in order to live comfortably in retirement.  On the flip side, it also begs the question of why people would find themselves in trouble as they draw closer to retirement age.

Anyways, I bet I'll fun reading this post in 10 years (or 20 years... or 30 years...).