Capital to Income Ratios

I don't find personal finance to be a particularly interesting topic, but in order to free oneself from the stress it can cause, it is a good idea to every now and again take stock of you situation.  Because the future is so uncertain, it is difficult to predict income and lifestyle years down the road, but here are some simple ratios that'll give a general guidepost and one can deviate as necessary based upon their particular situation.

The basic premise is you'll need 12x your income as savings when you retire assuming zero debt.  Your income can be taken literally, or as a "core income" for calculation purposes if you income fluctuates year to year.  CIR = Captial to Income Ratio and DIR = Debt to Income Ratio.

• 25 years old -- CIR: 0.1 / DIR: 
• 30 years old -- CIR: 0.6 / DIR: 1.7
• 35 years old -- CIR: 1.4 / DIR: 1.5
• 40 years old -- CIR: 2.4 / DIR: 1.25
• 45 years old -- CIR: 3.7 / DIR: 1
• 50 years old -- CIR: 5.2 / DIR: .75
• 55 years old -- CIR: 7.1 / DIR: .5
• 60 years old -- CIR: 9.4 / DIR: .2
• 65 years old -- CIR: 12.0 / DIR: 0

You get the idea.  You debt goes down as you age and your savings goes up. Obviously these ratios don't take into account all the complexities of life, but at the very least, they provide a decent guidepost.  One other smart thing about the ratios is that they do not count housing as an asset - only a debt - because even when you are old, you will still need somewhere to live.