What % should I figure in when calculating retirement? As in when I am trying to figure compounding interest over 40 years, what % should I use? About 8% is what I think I have heard but I don’t remember…
2007-01-24 07:39:28 · 2 answers · asked by sooners83 4 in Business & Finance ➔ Investing
It depends on how you plan to allocate your retirment portfolio. If you are ultra conservative and have little or no exposure to the equity markets, 8 % is too high...However, assuming a typical diversified equity portfolio, 8% is a good rule of thumb for average annual growth of the market over 40 years so I think your results will provide you with a very realistic future value....I would suggest doing a best case/most likely case/worst case scenerio that may help in seeing how important a few percentage points can make in the future value which may encourage you to save more.....do a few calculations ranging from 4% up to 12% and try your best to contribute enough so that your worst case (4% avg annual return) will provide you with adequate funds for you in retirement.
2007-01-24 07:57:31 · answer #1 · answered by SmittyJ 3 · 2⤊ 1⤋
24%
2007-01-24 10:54:05 · answer #2 · answered by Anonymous · 0⤊ 2⤋