Are you fighting for every penny’s worth of your retirement?
It’s easy to settle for “good enough,” particularly when you feel like you’ve worked hard on your plan and process
Unless you’ve made a point of extracting as much value as you can out of the market and your portfolio, though, you’re probably shortchanging yourself, and more than you realize. The math doesn’t lie In the grand scheme of most things, 1% isn’t much. When it comes to a stock market that averages an annual gain of 10%, however, reducing that figure by just one full percentage point per year can take a sizable toll on your long-term performance.
The graphic below puts things in perspective, comparing the cumulative growth of investing $10,000 per year in the S&P 500 (SNPINDEX: ^GSPC) for 30 years and achieving its average annual return of 10%, versus only earning an average of 9% per year on the same invested amount for the same time frame. After 30 years, even just giving up those 100 basis points of performance every year would leave you with $362,000 less than the nest egg you might have been able to build even with just a slightly better annual return. Granted, both retirement portfolios are still respectably sized.