Debt repayment & Net worth projection tool

I created a new tool, which was a pain in the butt to create, but I think it’s pretty nifty.

Key inputs (all in yellow):

  • Assets
  • Liabilities (including interest rates)
  • Income
  • Desired annual funding of each account (in green; put $0 if you don’t care to fund the particular type of account, like a 529 if you have no/grown kids)
  • Desired retirement age

Key outputs:

  • Wealth over time
  • Automated optimal debt repayment schedule (shown in blue, but you can override if you’d like)
    • I hard-coded $0 extra repayments towards mortgage in row 118 for now, but feel free to override by copying down the blue row above it.

Let me know what you think. As with any model, it is very sensitive to the assumptions. I assumed a 3% real return, which is probably somewhat conservative. If you change this number, of course, the output model will change considerably.

It’s downloadable here (link).

This spreadsheet, along with common sense, shows that the only way of accruing wealth (or getting out of debt) is to spend less than you earn. This is why I ruthlessly remove any expenditure from my life that doesn’t add value, which frankly is most expenditures other than the necessities of food, shelter, clothing, and my $15 3mpbs internet. I just spent a few days trouncing around the mountains with my family for a couple of bucks of gas and a couple of bucks in granola bars. The best things in life don’t cost much money.

Curious to see what your $100/month cell phone plan is costing you over your lifetime? Play around with the model and see. With this model, it’s easy to visualize how your consumption decisions today will influence your future wealth (and thus your future ability to consume).

People who criticize me for being naively cheap fail to understand that I’m simply trading off consumption today for either consumption or free time later in life. When my broke peers are eating beans and rice out of necessity in their old age, I’ll be eating beans and rice (b/c it’s cheap, healthy, and environmentally responsible) when I’m older while being financially secure. Does this mean I’m crazy?

Let me know what you think of the sheet and whether you found it helpful.

8 thoughts on “Debt repayment & Net worth projection tool”

  1. This is a killer spreadsheet! One question, on the graphs, does the horizontal axis represent age? Also, I wonder how you could fit in a formula for employer sponsored retirement plans? At my hubs’ univ. it’s call Optional Retirement Plan and 10% of salary is matched and contributed to this account (it’s a taxable account).

    • Thanks for the kind words. I thin it’s killer sheet as well but I’m biased, of course.

      Sorry about the crappily labeled axes. Yes, the X-axis is age.

      I updated the sheet to include a cell to more easily handle 401k matching. If you re-download, it will be found in cell E43.

      • Nice! So to clarify, the this “Optional Retirement Plan” is fully funded by his employer, and is totally taxable (we make no contributions to that account at all, it is 10% of his salary, basically just deferred compensation I suppose). I guess I could just plug in that amount under the Taxable- brokerage cell?

        Another question- I just realized my hubs’ employer also offers a 457 and a 403b. Granted, it will take us a while to fully fund his Roth 401k, my Roth IRA, and open and fund a Roth IRA for him, and then fully fund our HSA….I’m wondering in the crazy wild event that we are able to do all of the above (with 4 young kids at home), would he also be able to contribute to a 457 and a 403b in addition to his Roth 401k? Just a far out question.

        Loving your frugal tips aka. “Things I Like” section of the site. I recently raised my home ins. deductible to 10k and saved $255. I go with both insurers that you suggest and have found they have had the best prices and great customer service.

  2. Very nice! Fun to play with!
    It could be fun to add a 4th chart: Monthy SAVINGS… to track where your savings go. Essentially rows 105-130. It would be fun to see the growth of the 401 vs. the Roth etc. Also could be helpful for the decision of paying off mortgage early.

    Is there an ideal mix of net worth on retirement? Mine seems to be 50% tax deferred on retirement, moving to 70% at age 89.

    Do the net worth calculations take into account the 3% withdraw rates etc.?

    • Glad you like the sheet!

      I like your idea of where the savings went. I can throw that together pretty quick.

      The decision to repay mortgage early vs invest in stocks is a tough one. I think it’s an absolute no brainer to max out tax-advantaged accounts like 401k, IRA, HSA, 529 before touching either taxable brokerage accounts or mortgages. For me personally, my after-tax cost of mortgage is 2.875*(1-45%)=1.6%. Am I better in my taxable brokerage account? I think so due to higher expected return on stocks and b/c of tax loss harvesting, etc.

      Net worth calculations are independent of the 3% withdrawal rates – they are simply a result of today’s expenditures grown by inflation (except mortgages which are constant). As a result, the safe withdrawal chart is probably unnecessary in this sheet.

      I didn’t put a a ton of thought into the optimal draw-down of assets in retirement in the current model. If you read GCC,, he absolutely kills it. Before age 59.5, he simple does Roth IRA conversion ladders, eats dividends, and does capital gain harvesting since he’s in the 0% tax bracket for LTCG. I have learned more from his tax posts than from any other source on the internet. Perhaps a more sophisticated permutation of this sheet will include tax-free Roth conversions like GCC does.

  3. Maybe it’s just me, but the spreadsheet is totally malfunctioning. My 20k student loans just disappear right after March 2018….


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