My retirement plan in charts

By | October 7, 2013

This is the wall chart from Your Money or Your Life and my daily motivation.

Here are my monthly expenses for the last few years.


Here are my monthly incomes for the last few years. 

If you put them together, you can get a visual of the capital I used to first vanquish my student loans and now to fund my early retirement.  

After paying off my loans, I started to invest. I’ll post my thoughts on investing in a later post. (Summary: Vanguard. Index Funds.)

My assumptions:

  1. Inflation will be around 3%
  2. My investments will return around 7%
  3. Withdrawal Rate: I can take out 4% per year when I retire and the principal will not dwindle.

All of this translates into needing about 25 times my yearly expenses in investments. Here is the equation

(Net Worth) x (Withdrawal Rate) = Passive Yearly Income/12 = Passive Monthly Income.

My passive monthly income is what I then plot on my chart. Here are all three lines on one chart. And here is a close up of just expenses and passive income. As soon as they intersect, I will buy some coconut water to celebrate. 🙂 I’ll update this chart monthly.

29 thoughts on “My retirement plan in charts

  1. Linda

    Stumbled on your blog from somewhere else, really great posts so far! Thanks for this idea of tracking monthly expenses and passive income against income. I have a massive chart going of our total investments/net worth on a monthly basis, but never thought to track expenses vs passive income.

    Unfortunately we’re only 1/4 of the way until the lines to meet :/ Looks like you’re almost half way there – that’s brilliant!

    Do you take into account that after stopping working your expenses may drop slightly (or increase if you start travelling more?)

    1. Thriftygal Post author

      Hi Linda!

      My first non-spam comment. You have absolutely no idea how much this made my day! My work expenses are already mostly paid by work, so I’m more concerned about my expenses going up due to travel, but I am far enough off (time-wise) from the two lines crossing that I haven’t planned that far ahead yet. I want to cross “financial independence” off my bucket list and that’s the main reason for the chart. I imagine the next step is to build a cushion, but I have not yet thought that far ahead. 🙂

      Whenever I hear about anyone tracking anything related to their expenses, I get irrationally happy. What are you planning with your charts?

      Thank you again for taking the time to comment and not be spam. 🙂

  2. Kevin

    Wow. This post really opened my eyes up to the simplicity of the math behind saving for retirement. Being a goal-oriented person, using these charts would really help to keep me on track. Is it possible for you to post a “template” spreadsheet that I could start using. I think it would be incredibly helpful for me and the rest of your readers!

    Thanks and keep up the great work!!!

    1. Thriftygal Post author

      Kevin – that is a wonderful idea. I will put that high on my to-do list and let you know when it’s posted. Thanks for reading!

    2. Arjun Ramesh

      You can use Apps like Expense Manager to get a picture of how you’re spending. It also exports the data to excel if you want.

  3. Brian

    Thanks for your blog. Great info. I came across it via jlcollins. Keep up the good work. I’m trying as well!

  4. DDDenham

    I really like the idea of the Expenses vs Passive Income chart, going to add that to my own spreadsheet. I’m trying to achieve FI in the next 5 years so I like this your simple way to visualize your goal and progress over time!

    I keep a spreadsheet with monthly expenses for the past 5 years or so. I then calculate average monthly expenditures for every calendar month. Then as every month I record my expenses I’m able to not just see how that month’s spending compares to an overall average but to the average for that calendar month in particular (for example I almost always spend more money in December than in February so if I want to see if I overspent in a particular month it’s easier to put into context). I’m saving at a high enough level where I don’t feel the need to stick to a very strict budget on a daily basis but if I find that I’ve spent too much money at the end of the month then I can mentally tell myself throughout the next month to cut back a little.

  5. rocio baeza

    OMG! I just learned about you from Mr Money Mustache’s post. This is AMAZING!!! I had been following MMM for 2 years now and divulging in other personal finance/early retirement material. And I kept thinking about how I could represent this in charts. I found this at the perfect time. Thanks for your willingness to share this with others 🙂

  6. Vickie

    Do you have health insurance? Did you take into account the cost of this in your projected expenses after retirement?

  7. R

    Thriftygal-I have a few questions.

    1) In your spreadsheet, I see investments and 401k as separate categories. Are you investing all this in VTSAX? Or are they allocated differently? Right now I have a 401k and a Roth IRA (Vanguard Index Fund, yay!), 2 different funds being managed by different financial institutions. A part of me wants to consolidate this into 1 fund (Vanguard of course), mostly to keep it simple and avoid having to check different places for balances. I’m curious what your personal strategy is.

    2) Are you familiar with Farnosh Torabi’s So Money podcast? This was launched early last year and Farnosh has done a fantastic job bringing in guests to talk about their relationship with money and their experiences with money growing up. It would be awesome if you can get in her line up. I’ll send her a note. I’m sure you’ll have fun and enjoy indulging in this nerdy topic 🙂

    1. Thriftygal Post author

      In response to your questions: 1) My employer did not offer VTSAX as an option for my 401(k), so it’s in a target retirement fund. It’s still all on the same page in Vanguard though, so it doesn’t bother me too much having different funds. 2) I’ve tried throughout the years to listen to podcasts, but I’m a reader and I keep opening tabs while the podcast is on and reading something else, so I can’t pay attention to when people are just talking at me. 🙂 I’d be very much interested though in doing the talking. LOL.

  8. Molly

    Is this really possible for someone who only makes 40k a year? This seems like advice for people making 6 figures (which is uncommon for most of us)

    1. Thriftygal Post author

      It’s more about the savings rate than anything. You can make $300k a year and if you’re spending it all, you’ll never retire. It’s possible at $40k, it will just take longer!

  9. tomsang

    Molly – Here is a great article on the math and the impact on the percent saved. Anyone can retire early, how fast is determined based on your savings rate. As Thriftygal mentioned it may take longer if your income is lower as it is challenging to lower your expenses down to have a large savings rate. There are people that are living on like $7k a year, so it is possible.

  10. J

    Hi Anita, I’m very interested in reading your blog. Keep up the good work… er… you know what I mean 🙂


  11. Frank

    Congrats on your early retirement! Love this chart and will steal it for my wall. Keep up the great work

  12. M

    Thriftygal – What program do you use to make your charts / how do you make your charts?

    -Desperate right-brain person who struggles with making a simple excel spreadsheet

  13. Wai

    Hi Thriftygal! I found your blog via MMM. I read the interview and there was a comment:

    “If you have saved enough to meet the 4% rule and have the money stashed in low-fee Index funds, you’ll get 2% in dividends alone which can flow straight to your checking account. Then you simply set your account to automatically sell a tiny amount shares once per quarter to keep your checking balance where you want it. This is what I have done on years when my post-retirement income from miscellaneous hobby work was less than our spending.”

    Do you have a breakdown of % of what you have invested in to have a return of 7%?

    Do you emphasize on dividend return?

    Have you diversified in other investments like real estate?

  14. Xavier

    Hi Thriftygal, thanks for sharing your experience. I was wondering how you deal with taxes?

  15. SK

    I make $45K and have made more before in previous jobs. It’s like Thriftygal says, savings vs. spending. I used to be nowhere close to getting my family’s expenses and passive income lines to cross. I make less money than before and I’m only 3 years out from those lines crossing hopefully. I started this 2 years ago.

    Before I saved somewhat but did not track or have any type of goal such as freedom or anything so my savings rate ended up being all over the place and nowhere near what it needed to be. Now I save 50% plus so it’s definitely doable for you lower income earners out there! 🙂 I does take a little longer but I will be at 13 years into my career and will still be in my thirties when my lines cross.

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  17. Simon Kenton

    ” I will buy some coconut water to celebrate.”

    Where Ah come from, we don’t run into dry wit all that often. Like it a lot when we do, though. You might could have a good time reading some Chesterton.

    I do the wild celebration bit too when I hit an important goal. Pay off a mortgage, kill an elk that will feed us for almost 2 years, I’ll get a little crazy, and eat a York Peppermint Patty.


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