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Historically, US stocks have averaged around 10% annualized going back to 19261.10%
Assuming you can realize the historical 10% average, consider these scenarios:
A $10,000 investment (US Stocks) at age 25 would grow to $452,592 by age 65*
If you waited until 45 to invest the same $10,000, it would grow to just $67,275 by age 652.
The age you retire, your life expectancy and your goals for the assets during and after your life are key factors in determining the time horizon for your investments, or how long you will need your savings to provide for you.
But 1 in 4 65-year-olds will live beyond 904
Funding personal living expenses
Leaving an inheritance to heirs
Making a charitable donation from your estate
There are a number of factors that can influence your investment needs during retirement, and ultimately play a big role in determining your retirement strategy.
Inflation decreases a dollar's purchasing power over time
Average U.S. inflation rate per year
Yearly living expenses
But watch out: Prices for some goods and services such as health care can vary dramatically6,7,8
A successful investor has to make trade-offs between retirement needs and the market volatility they are willing to take on. The following chart can help you understand the tradeoffs between return and volatility with different combinations of stocks and bonds over time.
There's no "one-size-fits-all" solution to retirement planning. Click here to find out how we can help you achieve the comfortable retirement you've been working and saving for.
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