How much retirement savers can expect to earn So
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Posted On: 01/20/2024 5:44:52 AM
How much retirement savers can expect to earn
So how much can you realistically expect to earn on your retirement investments?
“I would tell them 4% to 6%,” Orman said.
The two different returns Orman cites serve different purposes, she said. The first example, with a 12% average rate of return, is to illustrate the power of compounding. The second is a lesson to anticipate a conservative return, “because you never know what can happen in life,” Orman said.
Orman’s conservative estimate is in line with Blanchett’s 5%.
Investors saving for retirement may see tools that provide return projections. However, it is important to be mindful of how those anticipated rates of return are determined.
For example, Fidelity provides a balance projection for a NetBenefits accountholder’s next milestone age that anticipates a 3.5% return, among other assumptions. Because those time frames tend to be shorter, using historical returns is not necessarily the best strategy for those estimates, nor is it intended to be a long-term growth assumption, according to the firm.
So how much can you realistically expect to earn on your retirement investments?
“I would tell them 4% to 6%,” Orman said.
The two different returns Orman cites serve different purposes, she said. The first example, with a 12% average rate of return, is to illustrate the power of compounding. The second is a lesson to anticipate a conservative return, “because you never know what can happen in life,” Orman said.
Orman’s conservative estimate is in line with Blanchett’s 5%.
Investors saving for retirement may see tools that provide return projections. However, it is important to be mindful of how those anticipated rates of return are determined.
For example, Fidelity provides a balance projection for a NetBenefits accountholder’s next milestone age that anticipates a 3.5% return, among other assumptions. Because those time frames tend to be shorter, using historical returns is not necessarily the best strategy for those estimates, nor is it intended to be a long-term growth assumption, according to the firm.
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