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Here’s How Much Later You’d Have To Retire If Market Returns Drop
We have used 3-5% for years in our client projections, depending on the individual. Anything higher is really stretching. You have to assume that bonds, for the most part will yield their coupon and not much else. And most equity analysts suggest mid-single digit returns for domestic stocks. Seems only logical. Better to plan for a lower return and look at projections based on that.
And this is the biggest reason to be aware of expenses. Heck, if you anticipate 3-6% return moving forward from a mix of bond and equity markets, subtract 1% or more for high expense ratio mutual funds and for some, another 1% if you are paying a fee based adviser. Now what are you left with after inflation? Negative growth.
Fund expenses ARE important as talked about in another thread. And Financial advisers, I believe, are being adequately replaced by new portfolio building products that will save investors a lot of money in the long run.
In the long run I'm of the opinion that when you choose to retire, barring a catastrophic health issue or similar, is dictated more by one's spending habits rather than the size or performance of one's nest egg.
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Fund expenses ARE important as talked about in another thread. And Financial advisers, I believe, are being adequately replaced by new portfolio building products that will save investors a lot of money in the long run.