The following Graph illustrates
John Spender's original plan. He wanted to achieve his
retirement goals in 10 years at age 62, continuing an $80,000 per year lifestyle.
The picture immediately showed a problem with his plan, and if he wanted confirmation, he
only needed to
analyze the numbers, year-by-year.
A second strategy was illustrated to him (the second graph). The
only difference
between the plans
was to reduce lifestyle expenditures to $64,000 per year.
Of course,
we can project
changes in
lifestyle
expenses at
different ages
as well. While having to reduce lifestyle expenses is not an exciting solution, the client
could see that
he had not built up sufficient assets, and that limited
his options.
Discovered
early,
financial
planning
allows time
for new
options to
work.
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