By July 20, 2012 Read More →

Importance of Higher Returns

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Earning the highest rate of return your risk tolerance will permit can make a big difference on the future value of investments over the long term.

Even a 1% or 2% difference in the investment rate of return can have a significant effect on future value of your investment portfolio.

See Also: Your Investment Profile
See Also: Real Rate of Return

 

If you set aside $5,000 per year in a tax-sheltered investment for 25 years and earn 6.00% per year, the investment will grow to a value of about $274,000.

If the same investment earns 8.00% per year instead, the investment will grow to a value of about $365,000.

By increasing your return by 2.00% per year, you wind up with $91,000 more in your nest egg.

 

Use this calculator to compare the growth of  an investment using two different rates of return.

Importance of Higher Returns Calculator


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