RetireJapan

goran wrote: ↑Tue Feb 20, 2024 1:25 am Would any of you be willing to share your calculation/estimation sheets?

Looking for an efficient format for Japan style investment and not reference numbers.
I am (relatively) newbie in my investment journey. 2 years since I started to seriously invest every month.
I have a rudimentary sheet for each year but nothing yet consisting of estimation for future.

I use different ways but one I quite like is the Mac's Retirement Savings template. Not sure how to upload an image but here is an example of the info on it (not my actual figures!)

Current Age: 54
Age You want to retire: 67 (I use this as that is when I should get UK Pension)
Life expectancy: 90

Next bit you fill in:
Desired income on retirement: ¥5,000,000
Annual contribution from other sources: ¥1,500,000 (pensions, but as mentioned in previous post I often just set this to 0 to be pessimistic)
Current amount of savings: ¥100,000,000
Rate of return on savings: 0% (I put this and inflation at 0 just for simplicity and pessimism)
Inflation rate: 0%

Then it fills in:
Starting monthly savings goal: -¥125,000 (so in this example it's negative and you could technically take 125,000 a month out of your portfolio every month and still hit the 5,000,000 target income at 67. When this figure reaches a negative monthly amount that you feel is fine for living on, congratulations, you've made it! It's really motivating when that savings figure crosses from positive to negative and then you watch the amount slowly increase towards the amount you need)

Amount of savings in 2037: ¥80,500,000 (this is the amount you would need to get ¥5,000,000 income at 67 and have it last till 90 with the above figures.

Now if I take the pension bit out of that and set it at 0 it shows I would need to save 96,154 a month to hit the target by 67 and would need 115,000,000.
As I say these are not my figures (apart from the age) but if you have a Mac, playing about with the retirement savings template is great!

goran wrote: ↑Tue Feb 20, 2024 1:25 am Would any of you be willing to share your calculation/estimation sheets?

Looking for an efficient format for Japan style investment and not reference numbers.
I am (relatively) newbie in my investment journey. 2 years since I started to seriously invest every month.
I have a rudimentary sheet for each year but nothing yet consisting of estimation for future.

I just use a Google sheet. I will make a YouTube video about it soon as I've had a lot of interest, but it's not particularly exciting!

I use a conservative 4% growth estimate for our investments and set up a formula that adds our annual contribution and multiplies the previous year's figure by 4%. Then each year I input the actual figure (which so far has been quite a bit higher than the estimate) and all the future numbers autocomplete.

I find it useful to think about various scenarios.

RetireJapan wrote: ↑Tue Feb 20, 2024 6:27 am I use a conservative 4% growth estimate for our investments and set up a formula that adds our annual contribution and multiplies the previous year's figure by 4%. Then each year I input the actual figure (which so far has been quite a bit higher than the estimate) and all the future numbers autocomplete.

I was thinking about this earlier: Is it best to add the year's contributions and then multiply by 4% or multiple and then add the contribution.

Tbh, I doubt it matters. And like you, I'm in the good-enough-is-good-enough camp when it comes to this stuff. Complicated tracking of things stresses me out.

Yossarian wrote: ↑Tue Feb 20, 2024 9:46 am I was thinking about this earlier: Is it best to add the year's contributions and then multiply by 4% or multiple and then add the contribution.

I ran some figures and was a little surprised the difference isn’t cumulative.

x= contributions to date
y= new contribution

(x + y)*1.04 - ((x*1.04) + y)
=1.04x + 1.04y - 1.04x - y
= 0.04y

The difference in any and all years' figures will be 4% of your contribution amount.

banders wrote: ↑Tue Feb 20, 2024 10:17 am
The difference in any and all years' figures will be 4% of your contribution amount.

OK. Not really worth worrying about then. Thanks for running the numbers

I'll stick to multiplying before adding the contributions. Like to be conservative anyway