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There are a few factors you should keep in mind in order to achieve future financial success.
Know how long you plan to work and how you'll invest your money.
Retirement - Order - Money
It's also important to consider how much you'll want to spend in retirement, and how long you might live, in order to know how much money you'll need.
Financial planning can be very complicated because you have to balance all the information and changes in your life.
Process - Factors - Impact - Probability - Success
To simplify the process, here are four factors that have the biggest impact on your probability of success.
This is one of the biggest factors in determining your financial success. Every year you work, you earn the following:
Year - Savings
One less year of spending down your savings.
One more year of saving for your retirement.
Year - Retirement - Assets
One more year of compounding retirement assets.
These three things directly correlate to a better probability of success. Your assets have more time to grow and compound. The added bonus is they'll have to fund your life for a shorter time.
Rate - Proportion - Probability - Success - Plan
The rate at which you save (especially in proportion to how much you spend) heavily affects your probability for success. Some will have to work longer to make their plan work. Unfortunately, they got a late start or their lifestyle didn't afford them the opportunity to save appropriately.
Saving more, and letting it compound, allows your nest egg to grow. You'll notice a direct link with savings and when you can afford to retire. Thus, saving makes the list of crucial items to consider.
Retirement - Plan - Spending - Variable - Consideration
Knowing how much you plan to spend in retirement is critical to crafting a useful financial plan. Spending is also a big variable when it comes to modeling. Take into consideration what it will take to make you happy in retirement, then use that to determine how long you...
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