The Retirement Paradigm

 

Letís look at 3 examples of investment performance and how they impact you and your retirement income.

Assume we have 3 investment options:

Option A ó Where money doubles every 3 years

Option B ó Where money doubles every 6 years

Option C ó Where money doubles every 12 years

Letís follow the impact of your investment decision today and how knowledge via education plays a significant part in your retirement income down the road.Assume we have a 40 year old with $25,000 accumulated thus far and assume no further contributions are made to his retirement account except for whatever growth that occurs.

 

†††††††††††††††††† Option††††††††††††† Option††††††††††††† Option

†††††††††††††††††††††† A†††††††††††††††††††† B††††††††††††††††††††† C

Age††††††††††† 3 years†††††††††††† 6 years††††††††††† 12 years

40†††††††††††† $25,000†††††††††† $25,000†††††††††† $25,000

43†††††††††††††† 50,000

46†††††††††††† 100,000†††††††††††† 50,000

49†††††††††††† 200,000

52†††††††††††† 400,000†††††††††† 100,000†††††††††††† 50,000

55†††††††††††† 800,000

58††††††††† 1,600,000†††††††††† 200,000

61††††††††† 3,200,000

64††††††††† 6,400,000†††††††††† 400,000†††††††††† 100,000

 

Assume at retirement an 8% yield each and every year during retirement. It becomes clear that Option B delivers 400% more income than Option C. Option A appears impossible yet 25 funds have performed at this level over the last 15 years.

Investment considerations can and do have a significant impact on your standard of living in retirement!

 

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