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 I - Growth of Retirement Accounts 1.200,000 $1,142.811 . Susan invests $5,000 Bill invests $5,000 . Chris invests $5,000 $1.000,000 annually between the annually between the annually between the ages of 25 and 35 ages of 35 and 65 ages of 25 and 65 In total, she invests In total, he invests . In total, he invests $50,000 $150,000 $200,000 $800,000 $602,070 $600,000 $400,000 $540,741 $200,000 25 30 55 60 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? 5. Using the data above, summarize an argument for why you should start investing when you are young. Graph II - How Much Millennials, Gen X, and Boomers Have Saved for Retirement How Much Millennials, Gen X and Boomers Have Saved for Retirement MILLENNIALS 6.3 2.2% (18-34) 42.2% 29.8% 11.2% GEN X 3.5% 4.9% (35-54) .. 29.8% 21.9% 11.2% 10.3% 8.8% 12.1% JI 6.2%% 5.8% BOOMERS & SENIORS 28.0% 17.3% 8. 7% 7.1% 10.3% 22.4% (55+) Don't have Have saved Have saved Have saved retirement savings $10K - 549K $100K - $199K $300K or more Have saved Have saved Have saved less than $10K $50K - $99K $20OK - $299K Courtesy of GOBanking Rates.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 2 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 $0 and $9,999 invested for their retirement so far. Why is this a potential problem?Graph Ill How Much You Need to Save Per Month to Have 51 Million at Retirement HD'W MUCH 'I'DU NEED TO SAVE PER MONTH TO HAVE 1 HILLIOII T RETIREMENT {as mum RATE] E . m E I: II? D . U1 I: E cl: Ln 5 I ._ z D E 2t} 25 30 35 III-0 15 in i5 HI AGE WH EH 'flf EEEIH SAVING 11. If you begin inyesting at age 25 instead of age 20, how much more do you need to invest per month to have $1M at retirement? 12. Why might some 20yearolds have difficulty investing $360 per month for retirement? 13. If you begin investing at age 45 instead of age 41]; how much more do you need to invest per month to have lm at retirement? 1Iifii'hy is this amount so much greater than the difference between 20 and 25? 13. 14. 15. 15. If you begin investing at age 45 instead of age 40, how much more do you need to invest per month to have lm at retirement? Why is this amount so much greater than the difference between 20 and 25? If you wait until you're 45 to begin investing, in]!!! much money will you need to invest, just for retirement, per year? Why might this be di'l'cult? Usingthe data in graphs II and III. how much will most millennials need to begin investing, per month, in orderto have $1M in retirement? Explain your answer. Now that you've analyzed these three graphs, list at least 4 things you have learned about investing for retirement