1 | Why You Need a Quick Check-In

Comprehensive retirement models are priceless, but they’re also time-intensive. Sometimes you just want the equivalent of stepping on a bathroom scale: a fast reading that says “headed the right way” or “needs attention.” The exercise below is that scale. It won’t replace a full plan, but it flags gaps early enough to fix them—long before you’re staring at retirement with twelve months to spare.

2 | What to Grab Before You Start

• Latest balances for every account earmarked for retirement—401(k), IRA, brokerage, high-yield cash.

• Your total annual contributions (include the company match).

• Years remaining until you hope to retire.

• A ball-park growth assumption—7% is fine for long-horizon stock-heavy portfolios.

• Your current take-home pay and roughly how much doesn’t get spent each month (the “leftover” number).

3 | Step-by-Step in Under Five Minutes

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‍A — Project today’s nest egg

1. Write down your present balance.

2. Apply the Rule of 72: 72 ÷ assumed growth rate ≈ years for each doubling.
   Example: 7% → about 10 years.

3. How many doublings fit into your timeline?
   Twenty years = two doublings → $500k becomes about $2 M.

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B — Project new contributions

1. Multiply your annual contribution by the number of working years left.

2. Assume, on average, each contribution is invested for half the period (again Rule of 72 gives one doubling over that half-span).
   $16k/yr × 20 = $320k paid in; one doubling → roughly $640k of future value.

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C — Add them together
Projected nest egg ≈ future value of today’s balance plus future value of contributions.
$2 M + $640k = $2.64 M.

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D — Translate into potential retirement income
Apply the 4% rule: future portfolio × 0.04 = first-year withdrawal.
$2.64 M → $105k/yr (future dollars).

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E — Convert future dollars back to today-money

1. Choose a conservative inflation rate (2–3%).

2. Future value ÷ (1 + inflation)^(years) ≈ today’s purchasing power.
   $105k ÷ 1.02^20 ≈ $70k in today’s dollars.

4 | Now Compare It to Your Lifestyle

• What’s your annual lifestyle cost right now?
  Easiest hack: take your monthly net pay and subtract whatever is left over, then annualize.

• Inflate that spending to retirement-year dollars using the same inflation factor.

• Gap analysis:

• If projected portfolio withdrawals + expected Social Security ≥ inflated spending target → generally on course.

• If they fall short → you’ve identified the gap early enough to close it (raise savings, delay retirement, add part-time income, downsize housing, etc.).

5 | Why This “Scale” Works—and Its Limits

It works because it forces you to:

1. Translate a static balance into future purchasing power.

2. Treat contributions as a growth engine, not an afterthought.

3. Ground everything back in what really matters—your household spending.

Its limits: it ignores taxes, sequence-of-returns risk, healthcare shocks, longevity variance, and the subtleties of Social-Security timing. Think of it as a triage tool, not a surgical plan.

6 | What If You Spot a Red Flag?

• Increase the saving rate (every additional $100/month invested for 20 years at 7% becomes ~$52k).

• Refine the investment mix—an extra 1% of return over two decades meaningfully widens the cushion.

• Push the retirement date out just one or two years; you save more, compound longer, and shorten withdrawal years—triple leverage.

• Create new income streams (consulting, renting a room, hobby-turned-side-hustle).

• Tighten future spending assumptions—particularly elective categories like travel and car upgrades.

7 | Turning the Quick Check Into a Real Plan

Run this mini-assessment once a year—birthday week is easy to remember. When the stakes feel bigger (ten years out, five years out), graduate to a full-blown retirement projection that handles taxes, Medicare premiums, required minimum distributions, long-term-care scenarios, and market volatility.

Need a head start? My Theorem Wealth Managment team offers a no-cost, no-sales-pitch comparative analysis—link under this video. Bring your back-of-napkin numbers and see how they stand up to professional software.

8 | Key Takeaway

You don’t have to spend hours in Excel to know whether you’re drifting or driving toward retirement security. Five focused minutes, the Rule of 72, the 4 % guideline, and an honest look at your spending will tell you if the trajectory is healthy—or needs a course correction while time is still your ally.

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