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Subject:  Re: IRA Rate of Return Date:  11/15/1999  2:08 PM
Author:  TTRoberts Number:  15388 of 88051

chuckwrd, you asked:

<< I have used several projection calculator's to try to determine what my income would be at age 62 from my Roth IRA. What is a good estimated rate of return to use for this section on the calcualtor??? I would think it would be 10%??? Is this low? I am 29 and have $4000.00 dollars in it now and plan on putting in $2000.00 a year until probably age 60?? >>

Yes, when doing your planning/projecting, using a 10% rate of return for equity investments is a good figure for over such a long period of time. It is not "low". Hopefully, you'll be able to do better than this . . .and better than average. But for PLANNING purposes, you don't want to get carried away with assumptions that don't have any historical basis.

That's a VERY good idea to put this amount into a Roth IRA every year. But even though you're doing the smart thing by starting early and taking advantage of what compounding can do over time, this amount invested will not be enough alone. This is because VERY important that you have to take into account inflation and what inflation does to one's purchasing power over time.

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