ANALYZE: Investing for Retirement Retiring on Social Security income alone is extremely difficult, which is why it is vital that people invest for their own retirement. Analyze the three graphs provided in order to learn more about investing for retirement. Graph | - Growth of Retirement Accounts 1. Which investor had the highest balance when they turned 65 in this example? 2. How are the actions of the three investors similar? How are they different? a. Similar: b. Different: 3. Susan invested $50,000 and Bill invested $150,000. Why did Susan have a higher balance at the age of 65? 4. What important piece of information is missing from this graph? Graph Il - How Much Millennials, Gen X, and Boomers Have Saved for Retirement How Much Millennials, Gen X and Boomers Have Saved for Retirement I MILLENNIALS 11.2% 10.3"8.8" BOOMERS & SENIORS 8.7%7.110.3% (55+) . Don't have Have saved Have saved Have saved retirement savings S10K - S49K S100K - $195K $300K or more Have saved Have saved Have saved less than $10K $50K - $99K $200K - $299K Courtesy of GOBonkingRates.com 6. What percentage of millennials have $100,000 or more invested for retirement? 7. How does the fraction of millennials with at least $100,000 in retirement compare to the portion of millennials who have no retirement savings? www.ngpf.org Last updated: 6/13/19 8. Summarize how the amount invested for retirement compares across the three age groups. 9. Explain why the percentage of people with $300,000 or more increases so substantially across the age groups. 10. 72% of millennials have between S0 and $9,999 invested for their retirement so far. Why is this a potential problem? Graph Il - How Much You Need to Save Per Month to Have $1 Million at Retirement HOW MUCH YOU NEED TO SAVE PER MONTH TO HAVE 1 MILLION AT RETIREMENT (6% ReTURN RATE) $14,261 86 = = wy e 5 [c] o =4 vy o = = vy = = = = S = o g 30 35 40 45 50 55 &0 AGE WHEN YOU BEGIN SAVING 11. If you begin investing at age 25 instead of age 20, how much more do you need to invest per month to have S1M at retirement? 12. Why might some 20-year-olds have difficulty investing $360 per month for retirement? 13. If you begin investing at age 45 instead of age 40, how much more do you need to invest per month to have S1M at retirement? Why is this amount so much greater than the difference between 20 and 25? 14, If you wait until you're 45 to begin investing, how much money will you need to invest, just for retirement, per year? Why might this be difficult? 15. Using the data in graphs Il and 1, how much will most millennials need to begin investing, per month, in order to have $1M in retirement? Explain your answer. 16. Now that you've analyzed these three graphs, list at least 4 things you have learned about investing for retirement. www.ngpf.org Last updated: 6/13/19