what kind of investment can i expect on my retirement plan, what's a decent percentage ?

Answer 1

Great question...tough to predict what kind of return is likely. Physical sciences are fairly easy to predict with mathematical exactitude. Economic or social sciences depend on the behavior of people which is not always rational.

Let's put together some rational thoughts about how to address an investment issue.

An investment represents giving up the present value of your money in hopes of receiving a gain in future dollars. The size of that future gain will depend on the riskiness of the investment. It's that basic.

Investments in fixed income instruments, or bonds, are considered far less risky then investments in equities (a fancy word for stocks.) When an investor purchases a bond, the investor is loaning his money to an organization with stated interest and principal payments. The organization can represent Uncle Sam, a case where there is essentially no default risk or a government like Argentina, which historically has had significant default and currency risk. The organization can be a corporation such as General Electric, which has historically been very conservatively managed and regarded as safe or a company like General Motors, which has recently had financial problems. As long as the organization can continue to make the payments (not always the case) then the investor can be fairly certain of receiving a reasonable rate of return. Depending on credit quality and length of the maturity, this return has averaged around 6 to 7 percent annually over the long run.

On the other hand, when an investor purchases a common stock (equity), you're investing in a business model that hopefully will produce earnings for the owners of the business (common stock shareholders). As those earnings grow, so, too, should the value of the stock. If the business model is risky, the stock may grow considerably or it may drop precipitously. Owning a business (equity investing) is more risky than loaning to a business (bond investing). Returns on equities have been shown to fluctuate approximately three times as much as returns on bonds. Equities have returned approximately ten to eleven percent over the long run but can vary dramatically over shorter periods.

In general, if you have a long time before you retire, it may well be worth the risk to buy some stocks or equity related mutual funds in your retirement portfolio. Over the long run, investments that are made in what are called value stocks (stocks which are cheaper than the average) have provided better returns than bonds have.

However, if you have less than five years until retirement, it is unlikely that you want to assume too much risk. Buy some high quality bonds or bond funds with your retirement assets. You will earn a higher return than a bank savings account and feel much safer than you would with stocks.

Best advice...if you don't feel confident in making the decision, get some help. Professional advisors called certified financial planners, especially those who operate on a fee only basis, have the ability to help you plan your retirement. They charge a fee that is proportionate to the amount that you have invested...in other words, their fee goes up only if the value of the investment goes up.

Good luck with your decision-making!

Answer 2

That depends on how old you are...
The younger you are, the larger % you should shoot for and get. If your older and retire in the relatively near future, you should be in "safe" investments like money market funds and you will be getting a much lower %. I'm 28 and take a fair amount of risk - shooting for 12-15%. But I'm young, if things fall, they've got plenty of time to correct themselves before I retire.

Answer 3

Warren Buffet projects a U.S. market return average of 7% for the next 30 years and he isn't the only one that comes up with the same number.

Answer 4

stocks have earned about 11% over the past 75 years
bonds have averaged about 6.5%
cash has been closer to 4%

There are dozens of mutual funds out there that have averaged over 10% over the past 40+ years (some for over 60 years).

Answer 5

There have been a number of studies which find that the AVERAGE annual return from equities is about 9%, and if you can obtain that, you will do very well.

Answer 6

Depends on how much you plan to withdraw. But I've heard 4% return and 4% growth is reasonable.

Answer 7

Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.

http://www.pathtoinvesting.org/index_fla...
http://www.stockcharts.com
http://www.streettalklive.com>... university. a lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:

fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy

technical analysis==(chart+indicator)>> when to buy

Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live

At the age of 32. my 401k is amassed 73,000.00 and 30000.00 in taxble account. by follow simple rule

Answer 8

proportion is in actuality asking the question "how lots out of one hundred?"on your occasion ,regardless of if that's 40-one out of three hundred then say that's X of one hundred.placed it interior the equation 40-one/3 hundred=X/one hundred 41x100=X x 3 hundred X=40-one/3 hundred x one hundred=thirteen.7 approx basic thank you to confirm is,divide the 40-one by ability of three hundred and then multiply by ability of one hundred.