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Hi all,
Forgive my basic questions.....
How do I come up with a reasonable assumption for the projected annual real growth of my retirement portfolio?
For simplicity assume my portfolio is 100% Vanguard Target Retirement 2035 fund (VTTHX) and is valued at $400k and is equally split between Roth IRAs and 401(k) (if that makes a difference).
I have a book by one of our esteemed members here that states a reasonable assumption would be that earnings in a diversified portfolio would grow by 8% a year, or 5% per year in real terms (after subtracting 3% average inflation).
I'd like to understand the basis for this assumption so I can put together a "total savings worksheet" like the one in the book. How do you determine projected growth for your portfolio? Are there any tools available that can help me? Thanks.
Dude
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