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Retirement rate in retirement
Old 09-10-2005, 08:19 AM   #1
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Retirement rate in retirement

I am curious what the average rate of return on investments are for the past 10 years. Broken down as
the easiet way for you to post.


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Re: Retirement rate in retirement
Old 09-10-2005, 08:47 AM   #2
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Re: Retirement rate in retirement

I would take any numbers posted with a grain of salt.* I have not kept close track of my investments for the last 10 years.* The problem is that computers come and go, software comes and goes.* There are only a couple of accounts that I have not added to nor removed from in the past 10 years so that I can believe the numbers on the fund's web site.* I wasn't using Quicken years ago, then when I switched computers it came with Money.* I have not bothered to transfer entries from one to the other.

CREF stock: 8.9%, TIAA guaranteed: 6.9%
The 10-year return of VFINX is claimed to be 9.9%.

In recent years since I've been paying attention to this, we have done better than the market (take that with a grain of salt* For example, VFINX has an annualized rate of return of -2.4% for the last 5 years while our software shows 1.3% annualized return. So we "beat" the average market by 3.7% a year on average. And that's with little fixed instrument allocation. Take that with a grain of salt, too.
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Re: Retirement rate in retirement
Old 09-10-2005, 12:41 PM   #3
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Re: Retirement rate in retirement

Quote:
Originally Posted by nellieb
I am curious what the average rate of return on investments are for the past 10 years.* Broken down as the easiet way for you to post.
Quicken's 10-year IRR gives me 31%/year. When I take today's retirement portfolio and back it up 10 years, though, that's way off. When I ask it to display portfolio value as of 10 Sep 1995 it says "0". Clearly some settings are interfering with each other.

Quicken's reporting also says "Securities held for less than a year can yield inaccurate return calculations." I bet that's correct and it tells me what the program's worth...

I haven't updated our net worth calculations in a couple years, but between 1995-2003 we averaged 10.7%/year. Our lifetime (last 20 years) is about 11% so that seems accurate enough.

We've only been ER'd three years so we don't have any 10-year data for ER. What's the point of your question?
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Re: Retirement rate in retirement
Old 09-10-2005, 02:28 PM   #4
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Re: Retirement rate in retirement

I only track net worth (not including home) growth since that is the only number that interests me.* For the past 9 or 10 years, it's been at a low annualized rate of 8.45% to a high of 29.29%.* I've been averaging about 16% a year.* That rate includes savings as well as investment growth.* I started keeping these growth records after my net worth (excluding home) hit $100K.

After full retirement, my goal is to have my net worth grow at least by the inflation rate while I am skimming off about 4%.* So that translates to a minimum gross growth of about 7%.* In years of higher inflation and/or poor investment growth, I may take less than 4% since 1% is dedicated to the "entertainment" budget, but I would probably not take less than 3%, unless absolutely necessary.
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Re: Retirement rate in retirement
Old 09-10-2005, 05:02 PM   #5
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Re: Retirement rate in retirement

Quote:
Originally Posted by retire@40
I only track net worth (not including home) growth since that is the only number that interests me.* For the past 9 or 10 years, it's been at a low annualized rate of 8.45% to a high of 29.29%.* I've been averaging about 16% a year.* That rate includes savings as well as investment growth.* I started keeping these growth records after my net worth (excluding home) hit $100K.

After full retirement, my goal is to have my net worth grow at least by the inflation rate while I am skimming off about 4%.* So that translates to a minimum gross growth of about 7%.* In years of higher inflation and/or poor investment growth, I may take less than 4% since 1% is dedicated to the "entertainment" budget, but I would probably not take less than 3%, unless absolutely necessary.

What is your allocation. You have done a great job.
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Re: Retirement rate in retirement
Old 09-11-2005, 02:14 PM   #6
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Re: Retirement rate in retirement

I have kept close track of the ROR of my major investments, plus the overall net worth for the past 10 years, including the equivalent ROR over the last 3, 5 and 10 years. Over the last 10 years my effective ROR has been 7.65%, but the %rates year on year have varied as follows:

1996 15.25%
1997 18.38%
1998 19.04%
1999 17.74%
2000 -2.44%
2001 -4.21%
2002 -10.27%
2003 16.08%
2004 8.10%
2005 3.73% (estimated)


Note that the effective rate over the 10 years, 7.65% is not calculated using the average of the 10 years, which would be 8.14%.

e.g. suppose you invest $1000 and over 3 years the ROR is 10%, -10% and 6%, the "average" ROR is 2% but what you have in your account is $1049, an effective ROR of 1.6%.


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