Main Scenario: Projected Balances if Contributions Increase 8%.
The aim of good planning is to create Scenarios where the variables (unknowns) are REALISTIC and ATTAINABLE. Here we focus on two crucial variables that are somewhat (but never entirely) within your control: (1) annual contributions toward savings & retirement plans, and (2) level of investment risk - as expressed by your expected rate of return.
Action Step: Increase Contributions by 8% Each Year.
If your investments average 7.00%, you'll need to increase your annual contributions by 8% EVERY YEAR to achieve your retirement goals. 10 years from now that means additional contributions of $7,579 OVER-AND-ABOVE what you're currently saving. If that isn't realistic, you choices are limited: Either improve your investment performance OR scale-back your retirement goals.
Main Scenario: Projections for Richard's 457