During our lifetime, we progress through different stages of our financial life cycle. Based on this life cycle, we should be able to determine how much money we need to save in order to retire and whether or not our goals need to be adjusted based on our future expectations.
It is extremely important to evaluate your retirement progress often and thoroughly. Obviously, if you’re saving more than you need to each year, you don’t have any problems. However; if you are saving too little, you need to recognize this before it’s too late. The last thing you want is to be 65 years old and because you underfunded your retirement accounts, you must continue working or depend on family members to take care of you.
Financial Life Cycle
I love infographics that provide a grand overview instead of focusing on minor details. Today’s infographic lumps financial wealth at different stages into age brackets, which provide a simple and easy to understand explanation of where you need to be. The early years are inserted to provide the reader with a small dose of humor and more crucial information is shared as we progress down the infographic.
The best information starts around step 5; the 30 – 39 year range. By this time, most of us have developed the tools needed to be financially responsible. We have been taught to start saving for future goals (house, wedding, retirement) that seemed lifetimes away. Just about everybody is guilty of needing instant gratification. It’s hard to save for decades, especially when you start at a young age. The prospect of retirement doesn’t seem real at times. As hard as it is though, it’s something that must be done.
READERS: Are you on par with the expectations set by this infographic? Do you think that you will be able to retire comfortably with these savings?