Thought this flowchart by BusinessWeek was neat. While I don't entirely agree with everything it says, I think it's a good starting point for newbies who I'd expect would modify its advice as they became more savvy about personal finance.

Good find!
Happy New Year, VinTek!

Thanks, Peachy. I find it a decent starting place for folks who don't know where to start. But as we all know, the hardest part is execution.

This is indeed a great roadmap. Of course there are oversimplifications and questionable rules of thumb (unavoidable with something like this), but perhaps the most damaging is the one on stocks vs. bonds: it doesn't account for the fact that many of us will be living in retirement for 25-30 years or more, which gives a portion of our nest egg a long time to continue to grow. By shifting so much of it into cash a few years before you retire, you may increase the risk that you'll outlive your savings.

The other rule of thumb I'd quibble with is the "Will that be enough to retire on" bar chart. It's hard to know all of the assumptions that lie behind those figures, but some people could get by on much less, others will need much more. For example, if you retire at 55 with only 5 times your salary in the bank and you live until you're 95, you're going to have to be awfully frugal during your 40 years of retirement.

I agree with both of your points. I really consider the flowchart a great starting point for asking the right questions about one's own future and goals. Also, it might be enough to get some people started. The worst action one can take isn't following the flowchart -- it's complete inaction.

my biggest quibble, and I understand this is a case-by-case thing, is that all debt is to be wiped out before one takes advantage of an employer 401k match. While someone with their head below the water probably should pass on the match, those still treading water would be wise to take advantage of it, imo of course.

The rest are just general "rules" of thumb and I can think of a billion examples for each why the rule isn't valid, but that is why it is a rule of thumb.

Totally agree with you. But the limitation of flowcharts like this are that in order to keep them from being mired in complexity, boxes are confined to yes/no exits. If you start putting exits that say "yes, but..." you wind up with a terrible mess. That said, I stand by my prior statement that it's a great starting point for asking the right questions.