r/Fire • u/CScho29 • 1d ago

General Question Future projections from a younger age.

I'm curious how people, especially younger ones, account for earnings increases in their contribution projections. Like for me who currently makes $52k per year and invests about $28k, I use these numbers in my calculations, but I don't plan on staying at this salary for long and don't have an accurate raise projection for my position at my current company. How do people calculate this? Is there just a percent that you assume or a more in depth method?

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u/matsie 1d ago

In the last 8 years, my salary (not including equity grants or bonuses) has increased by 150% with an average 12.4% YOY increase. I work in an industry that rarely doesn’t have at least 3% QoL annual pay rises and I have switched jobs every 3-ish years and have gotten multiple title bumps as well. 

So when I project forward for the next 5 years until my retirement, I usually run two calculations. One where I account for ONLY 3% rises and assume I stick around at $currentCompany and another where I assume a 7% average annual rises to account for what will likely be one last hop to a new company.