Can you retire on 500000?

Can you retire at 200% and still make all of your investments?

This article will help you figure out whether that’s possible.

Before we get to figuring out how to get to that 400 million dollar retirement goal, let’s take a look at how the various accounts would affect your retirement nest egg.

The Investment Options

ai5000 - January/February 2010 - page 27
If you are not planning to make big changes to your investment strategy, you might consider holding a Roth IRA or a 401K, as long as those options allow you to do so without having to file Form 8606. In most cases, you can even open new accounts to take advantage of an earnings deferral. But if you do decide to make a big change, you might want to consider an IRA in addition to a 401K or Roth IRA. To make things simpler, let’s just say that you would consider an IRA when a 401K is not working for you.

The typical IRA account comes with a low initial contribution and a hefty annual cost of contributions, so let’s assume that the average IRA contribution is 1% of your pay per year (which is pretty low even for large contributions). Then, the average annual cost of a traditional IRA is ~0.3% of your salary, or ~1.23% of your salary or $20,000 per year. So this year, that $20,000 would pay for your typical annual IRA contributions to grow to $100, which would increase your total pension amount per year by about 1% (assuming the total growth rate on a 10-year period remains the same at 1% per year).

If you are an investor who can’t afford to start contributing right away, there are other investments that are better suited to your needs. If you are not making much on your salary, you may want to look into the risk/reward of mutual funds like the Vanguard Target Retirement 2035 Index Fund or Roth IRA, which match a broad market index from year to year and pay out dividends or interest monthly. (I recommend the Vanguard Target Retirement 2035 Fund; however, if you are more concerned with your long-term return, consider trying out the Schwab Target Retirement. This is the Vanguard option with the best long-term performance.) Similarly, if you have money in stocks, if you don’t have that much exposure to the stock market you may want to consider the index and a fund like the MSCI EAFE 2060 index fund, which is designed specifically for investors with