Canfield Personal Finance Practice Exam 2026 – Complete Prep Guide

Retirement planning is crucial because it ensures financial stability during the years when individuals are no longer actively working. As people transition into retirement, they typically rely on their savings and investments to cover living expenses, healthcare costs, and other financial obligations. Without proper planning, individuals may find themselves unprepared for the financial demands of retirement, which can lead to significant stress and a decrease in quality of life.

Effective retirement planning involves setting clear savings goals, understanding potential sources of income such as Social Security, pensions, or annuities, and developing a strategy for withdrawing funds in a sustainable manner. This proactive approach helps individuals maintain their desired lifestyle, cover unexpected expenses, and avoid the risk of outliving their savings. Thus, the emphasis on financial stability through careful retirement planning is essential for ensuring that one can enjoy a comfortable and secure retirement.