When annual returns exceed savings

Tags: Personal Finance, saving, investing, investment performance, retirement planning.

December 31st 2015 - is the big day - when annual returns exceed savings.

Virtually 10 years from now! Seems like a long way. As a consolation, i can at least benchmark that I'm 26.8% of the way there.

December 31st 2015 - is the big day. One of the holy grails in personal finance is the point in time at which your annual passive earnings from investments and interest bearing accounts exceed your annual savings.

I put together a quick spreadsheet to see when this will happen for us. The spreadsheet factors annual savings in investment accounts as well as interest bearing accounts.

It does not factor inflation - except by using a diminished rate of return (i.e. 5% annual returns instead of 8% annual returns).

Is there a better way to account for this?It also factors in college costs for the little ones (in today's dollars).

Another frailty in the model is the assumption savings are made at a constant rate. Will my savings increase as the family earnings increase? Will they decrease to cover childhood expenses? Do the two cancel each other out? What are your thoughts?

I'd really appreciate feedback on this.When I have a better idea of html, etc... I'll try to post the table on the website.

When I have a better idea of html, etc... I'll try to post the table on the website.