Let’s say, theoretically speaking, that I could contribute $4,000 per year to a Roth IRA that has a 100% allocation of investments in the S&P 500 index. OK. According to this post at the Get Rich Slowly blog, the S&P 500 has averaged long-term returns of 10% annually since the thirties. I made a little spreadsheet to see what this could mean for my retirement if I chose to invest $4,000 for the next four years. I’ll let the numbers speak for themselves. View the spreadsheet here:
Interesting. Some people question whether the stock market will continue to grow in the future as it has on average over the last seventy years. Past results do not guarantee future performance, but even at a lower average yearly yield, money invested early makes the most growth before retirement.
Any thought or comments? Please share them below.