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I did a 'Retirement Plan' for a couple a while back. They were in their mid 50's and assumed their employers' matching RRSP plan would be able to sustain them when they quit working.
After working through their assets, how much they were investing, their average interest rates, and so on, it became apparent that this lovely couple would hardly be able to sustain their lifestyle until the age of 70.
Just like this couple, it is really easy to underestimate just how much you will need to be financially independent. That's why it's really important to know your financial reality.
Do you know by what year you can be financially independent; the age where you will no longer NEED to work to sustain yourself?
Do you know what annual income you can give yourself if you stop working at age 65, and for how long?
This is where 'retirement plans', 'financial independence plans', or whatever you want to call them come in handy. They show you your current reality. And the earlier you know your reality, the better off you'll be.
If your reality isn't leading you to a place you like, you can adjust and improve.
If your reality is better than what you hoped, you can relax and know you'll be financially secure. Either way, when you know your reality you don't have to guess and you can make the necessary adjustments.
"Retirement Plans' sound like they are for people who are getting close to retiring, but in actuality, the younger you are, the more helpful such a plan will be. The earlier you start setting money aside for 'retirement,' the less you need to contribute to reach your goal.