1. Number of years until retirement (retirement age minus current age) 2. Current annual salary
3. Projected salary growth factor
4. Value of salary at retirement (multiply line 2 X line 3)
5. Replacement rate
x .40
6. Income goal for the first year of retirement (multiply line 4 X line 5) PROJECTED SALARY GROWTH FACTORS
(by number of years until retirement)
20
25
30
35
40
45
1.8061
2.0938
2.4273
2.8139
3.2620
3.7816
For example, if you are now 30 years old, plan to retire in 35 years at age 65, and earn $50,000 a year, the calculation for Step 1 would look like this: