ANALYZE - Investing For Retirement - 24-25

NAME: Sian Thigpen DATE: 11/13/2024 BLOCK: 4A
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 to learn more about investing
for retirement.
Graph I - Growth of Retirement Accounts
1. Which investor had the highest balance when they turned 65 in this example?
Looking at the graph, Chris clearly had the highest balance at age 65. His line on the graph
reaches the highest point compared to Susan and Bill.
2. How are the actions of the three investors similar? How are they different?
a. Similar:
 All three investors started with the same initial investment of $5,000 annually.
 They all invested for a period of 40 years.
b. Different:
 Susan invested for 10 years (ages 25-35), contributing a total of $50,000.

 Bill invested for 30 years (ages 35-65), contributing a total of $150,000.
 Chris invested for 40 years (ages 25-65), contributing a total of $200,000.
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3. Susan invested $50,000 and Bill invested $150,000. Why did Susan have a higher balance
at the age of 65?
This is where the magic of compound interest comes into play! While Bill invested a larger
amount overall, Susan's earlier investment had more time to grow and compound, leading to a
higher overall balance.
4. What important piece of information is missing from this graph?
The graph doesn't show the rate of return on the investments. This information would help me
understand how much the money grew over time.
5. Using the data above, summarize an argument for why you should start investing when
you are young.
Starting to invest early in life is like giving my money a head start, The longer my
investments must grow, the more they can compound and multiply. Just like Susan, even with
a smaller initial investment, I can build a significant amount by starting early
Graph II - How Much Millennials, Gen X, and Boomers Have Saved for Retirement
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6. What percentage of millennials have $100,000 or more invested for retirement?
11.2% 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?
The percentage of millennials with at least $100,000 in retirement is smaller than the portion of
millennials who have no retirement savings. Which is a significantly larger percentage than those
with $100,000 or more.
8. Summarize how the amount invested for retirement compares across the three age
groups.
From millennials to Gen X and then boomers, the percentage of people with higher amounts
invested for retirement increases. This means that older generations tend to have more money
saved for retirement compared to younger generations.
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9. Explain why the percentage of people with $300,000 or more increases so substantially
across the age groups.
Older generations have had more time to invest and grow their wealth. Over time, investments
grew exponentially due to compound interest. The Older generations have likely been in the
workforce longer, earning higher salaries and contributing more to their retirement savings.
10.72% of millennials have between $0 and $9,999 invested for their retirement so far. Why
is this a potential problem?
It may be harder for millennials to invest in their retirement if they start saving later in life. Their
savings could also decrease over time due to inflation. They also struggle to achieve their
retirement goals because of their own long term goals that could affect their retirement goals.
Graph III - How Much

You Need to Save Per
Month to Have $1
Million at Retirement
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11.If you begin investing at age 25 instead of age 20, how much more do you need to invest
per month to have $1M at retirement?
According to the graph, if you start at 25, you'll need to invest $500 per month. If you start at 20,
you'll need to invest $360 per month. So, you'll need to invest an extra $140 per month if you
start at 25.
12.Why might some 20-year-olds have difficulty investing $360 per month for retirement?
Many 20-year-olds are just starting their careers, have student loans, and are focused on
building their lives. They may not have a lot of disposable income to put towards retirement
savings.
13.If you begin investing at age 45 instead of age 40, how much more do you need to invest
per month to have $1M at retirement? Why is this amount so much greater than the
difference between 20 and 25?
If you start at 45, you'll need to invest $3,421 per month. If you start at 40, you'll need to invest
$1,435 per month. So, you'll need to invest an extra $1,986 per month if you start at 45. The
difference is so much greater because you have less time for your investments to grow.
14.If you wait until you’re 45 to begin investing, how much money will you need to invest,
just for retirement, per year? Why might this be difficult?
If you start at 45, you'll need to invest $41,052 per year. This is a significant amount of money to
save, especially if you have other financial obligations like a mortgage, car payments, or family
expenses.
15.Using the data in graphs II and III, how much will most millennials need to begin investing,
per month, in order to have $1M in retirement? Explain your answer.
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Graph II shows that 42.2% of millennials have no retirement savings. This suggests that many
millennials haven't started saving yet. If they want to reach $1 million by retirement, they'll likely
need to start investing around $500 per month, based on the data in Graph III.
16.Now that you’ve analyzed these three graphs, list at least 4 things you have learned about
investing for retirement.
 he earlier you start investing, the less you'll need to save each month.
 Compound interest is powerful: Over time, your investments can grow significantly due to compound
interest.
 Retirement savings can be a big commitment: Saving for retirement requires discipline and
sacrifice.
It's important to start saving early: Even small amounts can add up over time.

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NAME: Sian Thigpen DATE: 11/13/2024 BLOCK: 4A

ANALYZE: Investing for Retirement

Graph I - Growth of Retirement Accounts

 Susan invested for 10 years (ages 25-35), contributing a total of $50,000.

4. What important piece of information is missing from this graph?

11.2% of millennials have $100,000 or more invested for retirement.

Graph III - How Much

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