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Understand Your Lifetime Personal Savings Requirements

VeriPlan helps you to understand your lifetime personal savings requirements and whether your current savings rate is sufficient

How much you earn, spend, and save are by far the most dominant determinants of your long-term financial well-being.

You need a means to evaluate your current sustainable lifecycle consumption rate. VeriPlan provides such a means. VeriPlan projects your wealth and your potential estate in each year through age 100. VeriPlan offers you unprecedented direct control to perform your own automated personal financial planning.

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If relative wealth is measured solely as assets currently owned, then financial and investment planning would be relatively simple. VeriPlan, however, takes a broader view. While higher income and more current assets obviously help, the consumption differences between one person or family of similar income and another will determine who builds sufficient assets over time. A person with millions of dollars who spends at very high and unsustainable rates, yet still achieves little life satisfaction in life, arguably is dollar wealthy now. Will he be wealthy in the future, and should we really consider him wealthy now, if he is headed toward financial ruin?

Another person who has lesser dollar wealth now, but who achieves higher satisfaction from more modest expenditures that are sustainable across a lifetime, in fact, may be more “wealthy” now, because his financial trajectory is sustainable. By looking at wealth as a lifecycle pattern of sustainable expenditures within one’s resources, then people who are truly wealthy cannot be identified solely by their current assets. While personal wealth should measure current financial and other salable assets, it should also measure the ability to sustain expenditure rates, build assets, and weather financial crises across a lifetime.

Your intention to meet all expenses and debts across your lifecycle should influence your current financial behaviors and your current financial plan. You should consume and save across your lifecycle in a balanced and conservative manner. Since the future offers neither guarantees nor any predictability, you must further restrict current consumption to build substantial assets that can provide buffers for times of future difficulty, to fund your retirement, and to provide for an estate, if desired. You need a means to evaluate your current sustainable lifecycle consumption rate.

VeriPlan provides such a means. While most people tend not to save enough, VeriPlan is not a “you must always save more” projection engine. VeriPlan projects your wealth and therefore your potential estate in each year through age 100. You can adjust your projection assumptions and decide about the balance you wish to set between your current expenditures and your projected estate (or lack thereof) in the future. The small minority of people who already save significant amounts and/or who already have substantial assets can use VeriPlan to help decide when they are comfortable with increasing their current consumption.

Most people, who want a forward-looking lifecycle financial planning toolkit like VeriPlan, already use one of the many available methods for current budget tracking. VeriPlan does not require you to adopt yet another personal budgeting system. With a few adjustments, you can use the output of your current budgeting system to determine your baseline of expenditures for VeriPlan’s projections.

Because the future is completely unpredictable, your ability to modify VeriPlan’s assumptions over time can help you to adjust as the financial world around you changes. You can change any value in VeriPlan and instantly develop a new projection. VeriPlan allows you to update all assumptions, such as tax rates, personal asset values, asset allocations, and asset growth rates. VeriPlan is also a tool that can evolve as your life evolves. VeriPlan is always ready for your next update, unlike paper plans that will increasingly grow obsolete, as time passes.

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Understand Your Lifetime Personal Savings Requirements

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