You almost certainly are too optimistic about how fast your retirement portfolio will grow.
And that could cause grave problems for you in coming years. A too-high return assumption leads you to withdraw too much from your portfolio early in your retirement—thereby shortchanging your later years.
Most of you can readily appreciate why that is unrealistic. If anything, you want to do the opposite of extrapolating: Given today’s historically low interest rates, probably the most realistic long-term return expectation for the fixed income portion is that, at best, they will merely keep even with inflation—and more likely produce significant losses.
Recency bias is evident in investor expectations. Consider the responses to Natixis’ annual “Survey of Individual Investors.” Each year, one of the questions the firm poses to respondents is: “What are the real annual returns you expect to achieve in the long term?” On average since 2014, their answers have been higher when the stock market’s trailing returns were also higher.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Inflation on the shelves means deflation in confidence, a study findsUnless inflation comes in at around 0.2% a year for the next decade, bondholders are going to be right out of luck.
Read more »
Social Security Online Statements Provide Key Information to Help You Boost Your BenefitsNewly redesigned online benefit statements may hold key information for boosting your Social Security retirement benefits.
Read more »
The Best Presidents Day Sales You Can Shop Right NowFrom the aforementioned up-$700-off discounts on top-rated mattresses and bedding to up to 60% off sales on big-time fashion and beauty retailers like Nordstrom, this is your one-and-only place to get all the must-shop sales.
Read more »
Veterans Yoga Project Helping Long Island Vets Cope With Stress, Painful MemoriesLong Island veterans are practicing yoga to improve their minds and bodies. Those who served our nation said the nonprofit Veterans Yoga Project has reduced their pain and stress. GusoffTV reports.
Read more »
The IRS Warns You Have to File by March 1 If You Did This — Best LifeSome taxpayers might hold off on their taxes until the mid-April deadline, but the IRS just warned that you could be required to file early.
Read more »
Toyota patented a manual transmission for electric carsToyota may have a way to save the manual transmission in classic cars converted to run on batteries.
Read more »