What after tax growth rate are you using for your investments?

[dex]

Note: The Poll should state: What after tax growth rate are you using for your investments?
In the poll - round to the closest whole number.

I take my net worth (excludes home - no mortgage) and use 5% for investments.
Investments - 5% - for all investments
Pension - grow at 1/2 of 1%
Social Security - 2.5%

I use 3%/year inflation

Expense growth 4% - (not 4% of net worth - the 4% computes to about 3.9% of net worth)

If I use 4% for an after tax investment and 3% for inflation; my net worth after expenses at 85 is the same as it is now (plus my house)

I'm thinking the 5% for investments might be a bit high in the coming years.

Any thoughts?

[OAG]

Investments 2% after taxes (actually it is 3% today but doubt it will stay that way when taxes increase or returns decrease in the near future).

Retired pay 3% after taxes

Social Security 10% a year for next two years then 3% (COLA)

I suspect, and have no way to prove it; JMO, investment growth AFTER taxes and inflation going forward may be closer to 0% or FLAT.

[dex]

Originally Posted by OAG

Investments 2% after taxes (actually it is 3% today but doubt it will stay that way when taxes increase or returns decrease in the near future).

I just want to confirm - the above #'s are not after inflation?
If so I didn't want that number. I take inflation into account in another calculation.
txs

[ziggy29]

Is this supposed to be "real" growth rate (after inflation) or "nominal" growth rate (in unadjusted and inflated dollars)?

I plan somewhere around 4% real return. [Edit to add: that's with about a 70/30 asset mix]

[Gotadimple]

The poll says, what growth rates are you using for your investments. The title of your post says what 'after tax' growth rates. I can't comment on after tax as it will be different for everyone, and my investments are composed of both tax-deferred and taxable, so the 'after tax' may be higher or lower once I take distributions.

I expect:

5% growth on my investments, excluding CDs and cash
2% growth on cash
3% growth on CDs
3% inflation

-- Rita

[Rambler]

5% after tax on equities (trying to keep this conservative, but may adjust downward)
5% no tax on muni bonds
2% no tax muni MM funds
1% interest checking
3.5% inflation

R

[dex]

Originally Posted by Gotadimple

The poll says, what growth rates are you using for your investments. The title of your post says what 'after tax' growth rates. I can't comment on after tax as it will be different for everyone, and my investments are composed of both tax-deferred and taxable, so the 'after tax' may be higher or lower once I take distributions.

- Rita

Question - Thanks - I don't know how to change the poll question so I put a note in.

After Tax investment growth rate - It is difficult to formulate a question that covers all the variables. - I was trying to keep the interest question as simple as possible. I was thinking that if a person is expecting a gross investment growth rate and they know they are in the 25% tax rate they reduce their gross investment rate by a percentage approaching 25% to acknowledge taxes in their computations.

[freebird5825]

"anything i can get" was not an option so i picked 5%.

most fund family sites post "after tax returns" assuming the 28% tax bracket [sad music...oh how i miss that ol' bracket of mine...]

so how would we ever know the answer?

[unclemick]

I take the 9% before tax growth shown on the Vanguard site for my historical asset mix.

But I actually use what I need or at least for the last 15 years - less in cheap years and more in 'fat' read usually remodeling years(like the year after Katrina).

I retain a mental picture of portfolio SEC yield as lower bound and 5% variable as upper bound - I used the refined finger in the belly button to prognosticate the coming year as fat or skinny.

Handgenades, horseshoes, and number 2 pencils are my favorite - although I only use the number 2 if I want to go to the second decimal place or beyond - planning future wise.

heh heh heh - plus I have a 0 to 1yr 'float' in my Vanguard MM Prime account wiggle wise. Don't ya just love tech talk. When the light bulb came on after forty yrs of investing and I realized how stone simple it all was - made me so mad I could just spit. .

[dex]

Originally Posted by freebird5825

"anything i can get" was not an option so i picked 5%.

This is about what percentage you use to model the future; not what you would like as a return.
txs

[unclemick]

Hmmm - in retirement I still can't get Mr Market to do my bidding - and give me a nice smooth 9% before tax growth rate.

But I sure can get really cheap or extravagent(within bounds) on expenses thus moving my tax rate around significantly.

heh heh heh - No not zero - I file single.

[dex]

Originally Posted by unclemick

Hmmm - in retirement I still can't get Mr Market to do my bidding - and give me a nice smooth 9% before tax growth rate.

heh heh heh - have you checked out Vanguard High Yield Bond fund - closing in on 9% the last time I looked?

[Gotadimple]

Originally Posted by unclemick

- I used the refined finger in the belly button to prognosticate the coming year as fat or skinny.

Handgenades, horseshoes, and number 2 pencils are my favorite - although I only use the number 2 if I want to go to the second decimal place or beyond - planning future wise.

Ah! Ha! (not HaHa)

I knew it!

In spite of all that whispering around about Norwegian Widows and Wellsley, you're a technician and not a value investor.

Of course, as I analyze it, the technician in you adheres to the K.I.S.S. principle.

-- Rita