6 ms·
OK 100k principal, add 1k every month for 30 years. Compound at 7% --> 2M 50k principal, add 1k every month for 30 years. Compound at 7% --> 1.6M Withdrawing
by kirpekar 12y ago
OK
100k principal, add 1k every month for 30 years. Compound at 7% --> 2M
50k principal, add 1k every month for 30 years. Compound at 7% --> 1.6M
Withdrawing 50k today costs you 400k in retirement
400k = 20% of 2M = 8 years of your 40 year career
- ronaldx 12y agoYes, you've failed to consider the time value of money. https://en.wikipedia.org/wiki/Time_value_of_money https://en.wikipedia.org/wiki/Time_value_of_money 50k today is worth more than 50k in the future. (Consistent compounding at 7% is extremely optimistic, even before considering inflation at 3%+).