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Comparing the financial statements from one year to the next will provide a good measure of your progress toward retirement. To be on track, your net worth should have increased over that of the prior year. If it hasn't, then you must determine the reason -- and whether it was in your control or not -- because the lack of an increase places your entire retirement plan in jeopardy. Was the market down that year? That happens, so don't panic and pull all your money out because of a short-term fluctuation. Are you further in debt? If so, how can you whittle it down so your retirement plan stays on track?

On the other hand, your net worth may have increased handsomely. If it has, you should determine what gave rise to that increase. Can resources now be devoted to other goals unrelated to retirement? Can you retire even earlier than originally planned?

As far as the Cash Flow Statement is concerned, you should note the reasons for any major changes in your expenses.

• Do those changes have any impact on what you will spend at various points in your retirement?
  
  
• Do greater expenses mean you must now save less? Can you save more?
  
  
• If you are able to save more, will those savings be targeted toward your retirement or some other goal?
  
  
• If your living expenses have gone up, will that increase have an adverse impact on your ability to retire on the date desired? How can those expenses be reduced, either today or in retirement? (You'll find a bevy of tips for cutting expenses over at our Living Below Your Means discussion board.)

Based on the new financial numbers, we should re-enter our planning data in our retirement calculator. Are the calculator results significantly changed as a result of the new data? How does that affect us? Until we run those calculations using our most recent financial data, we won't know. As we pointed out in Lesson 8, we must always interpret the results of retirement planning calculators with a grain of salt. Still, the projections the calculators provide give us a good indication of how well we are succeeding financially in meeting our retirement goals. Check those projections annually.

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