How Planning Depends on Investing

If the purpose of retirement planning is to answer the question ‘How much do I need to save?’ then how is this related to investing? To find the answer, ask yourself another question — “What will I do with the money I save?” The answer to this second question is investing. How you invest your savings will have a dramatic effect on how much your savings will earn. If your savings earn a lot, then you will not have to save as much, and if they earn very little, you will have to save more.

Your retirement plan will be based on certain assumptions, such as how long you will live and how much your savings will earn. Without these assumptions, you would never be able to complete your plan. In our Quick Guide to Retirement Planning, we help you estimate your savings needs by making several assumptions based on commonly accepted retirement planning guidelines. The idea is to provide you with a simple way to start saving quickly. Once you are saving, you can always go back and use our Advanced Guide to Retirement Planning to refine your assumptions. The key point is to get started as soon as possible, because the earlier you start, the easier it will be to reach your goals.

• How much do you need to save? — Begin planning and saving for retirement now
• How much will my savings earn? — Learn about investing for retirement