What Does an Extra 1% Mean
If you can learn to live with risk you may be able to retire earlier and possibly in a better financial position. Increasing the rate of return on your investments by as little as 1 percent can have a dramatic impact on your retirement dollars. Let’s take a closer look.
Let’s assume you invested $1,000
|
Average Annual Rate of Return
|
| Value After |
8%
|
9%
|
10%
|
|
5 years
|
$1,490
|
$1,566
|
$1,645
|
|
10 years
|
$2,220
|
$2,451
|
$2,707
|
|
15 years
|
$3,307
|
$3,838
|
$4,454
|
|
20 years
|
$4,927
|
$6,009
|
$7,328
|
|
25 years
|
$7,340
|
$9,408
|
$12,057
|
|
30 years
|
$10,936
|
$14,731
|
$19,837
|
As you can see, increases in your return as well as time can impact your retirement account considerably.
Increases in your return does not necessarily require you taking more risk. The small difference in the cost of your Plan can add up too. Say for example, the funds in your 401(k) Plan carry high expenses such as sales charges or high management fees. This will also impact your account over time by taking away from the value of your account. A few necessary tweaks to your plan such as switching to lower cost no load funds can boost your nest egg by hundreds of thousands of dollars by the time you retire. Call on us and we’ll show you how.
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