Section 4 Basic Principles of Investing You may have to develop and maintain an investment strategy in retirement that can provide the returns needed to prevent you from running out of money. Obviously, higher returns give you more money to use for retirement income. An investment of $500,000 growing at 3% compounded annually over a 20-year period. Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Balance $515,000 $530,450 $546,361.50 $562,754.41 $579,637.04 $597,026.15 $614,936.93 $633,385.04 $652,386.59 $671,958.19 $692,116.94 $712,880.44 $734,266.86 $756,294.86 $778,983.71 $802,353.12 $826,423.82 $851,216.53 $876,753.03 $903,055.62 Final Investment Balance: $903,055.62 An investment of $500,000 growing at 6% compounded annually over a 20-year period. Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Balance $530,000 $561,800 $595,508 $631,238.48 $669,112.79 $709,259.56 $751,815.13 $796,924.04 $844,739.48 $895,423.85 $949,149.28 $1,000,090.20 $1,066,464 $1,130,451.80 $1,198,278.90 $1,270,175.60 $1,346,386.10 $1,427,169.20 $1,512,799.30 $1,603,567.20 Final Investment Balance: $1,603,567.20 This is a hypothetical example for illustration purposes only. Actual investor results will vary. Chapter 6: Your Action Plan
