you receive a surprised inheritance of $100,00 when you were 40. how do i list all the investments?

Question

i need to show what would i take home income will be the first month after my retirement.
PLEASE HELP ME!!!!!!!!!!!!

Answer 1

Unless you put it into something with a fixed rate, which at age 40 wouldn't be a very good idea, there's no way to know just what it will grow to by the time you retire. And you might not want to have it in the same investments for 27 years.

Answer 2

I am not certain that I understand this question. I assume this is a hypothetical class project and the assumption is that you are 40 years old and receive 100K but you will not retire until 65 and during that time you have invested the money so that it will grow until retirement. Now when you become 65 you may wish to reallocate those funds to provide a monthly income.

How do you list all of the investments? Just invest it all in a mutual fund with a long term return of 10%. You can then that to assume that that will continue until retirement. Assume Vanguard Global Equity Fund. I think its 10 year return is about 12% but assume 10%. At retirement you will have about $1,085,000. You can reasonably assume about a 6% annual return from fixed income investments, which would give you $65,000 annually or $5417 monthly. Of course your investment allocation will determine your monthly income, but that is a reasonable assumption.

Answer 3

Investments would be selected based on goals and a risk profile for the investor. $100,000 invested with one mutual fund family with give the investor a break point for sales charges, and then the monies could be invested into 4 to 6 funds to meet goals and the requirements of the risk profile (growth or moderate growth) and proper diversification. Say an average 8% rate of return would grow to be over $860K.

As to how much you want to withdraw per month in retirement? Well that all depends on lifestyle and life expectancy, but it's possible to have a comfortable monthly retirement income and still have a pile of money to pass onto hiers.