It’s 5:00 A.M., my alarm is blaring and I am groggily waking up to start another 40-hour work week ahead of me. There are countless things I would rather be doing today, the first of which would be shutting off that alarm and going back to bed.

I’m sure many of you had similar experiences. Whether you love or hate your job, there are times where you wish you can take the day off to do absolutely nothing. But of course you can’t, you have bills to pay and limited vacation time to take, so calling in just because you’re “not feeling it” is just not worth it. At least you only have to do this until retirement.

But just how long is it till retirement? Is it 50 years from now, 60, 200? How much time is left before finally ignoring that alarm clock and head back to bed?

Most of us can’t answer that question. We know we should be saving X amount of money per paycheck, but how much do we need to save in total if we want to cut ties with the business world and enjoy life without work?

How Much Is Enough?

If you can put a number to when you can quit your job, what would it be?

I’ve heard a lot of people rattle off numbers ranging from $3-10 million. Breaking that down, you are talking about saving somewhere between $100,000 – $300,000 a year for the next 30 years. Those are some awfully high numbers!

Realistically, most 9-5 jobs aren’t going to achieve that amount even with saving every penny earned. So instead, we want to try and find a number that is much more plausible.

To figure out your number, you got to answer yourself three important questions:

• How much do you currently spend in a year?
• What kind of life do you want to live if you weren’t working?
• How much money would you need to reach your goals?

To give you an example, my wife and I have a complete breakdown of our daily expenses. She and I love to travel but are limited to traveling a few times out of the year. When we do travel we have one expensive trip that cost us about $3,000 on average, and several smaller trips that cost us, at most, a total of $1,000. We enjoy taking these trips and plan on keeping it going after retiring. So when figuring out our retirement plan, those $4,000 will be an additional yearly cost.

So my total estimated cost each year is close to $40,000. In FIRE, the rule of thumb is to multiply this amount by 25-30 to get a retirement fund range. This would mean my retirement fund ranges from ($40,000 * 25) $1,000,000 to ($40,000 * 30) $1,200,00.

Keep in mind that this is just a baseline for retirement. If I find myself happier with spending more than $40,000 a year than it’s totally fine to just increase that range accordingly. The important thing is to at least have a range in mind for retirement

Now that the range is figured up it’s time to move on to the next steps.

So What’s Next?

So now that I have a baseline in mind, there are two focuses I need to spend my time on:

1. How to make enough money to reach my baseline?
2. How do I save enough to get there faster?

This leads up to my next post which will go more into Spending vs Saving and how making it to early retirement is possible without needing to give up much.

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