The Retirement Paradigm

Let’s look at 3 examples of investment performance and how they impact you and your retirement income.

Assume we have 3 investment options:

Option A — Where money doubles every 3 years

Option B — Where money doubles every 6 years

Option C — Where money doubles every 12 years

Let’s follow the impact of your investment decision today and how knowledge via education plays a significant part in your retirement income down the road. Assume we have a 40 year old with $25,000 accumulated thus far and assume no further contributions are made to his retirement account except for whatever growth that occurs.

Option Option Option

A B C

Age 3 years 6 years 12 years

40 $25,000 $25,000 $25,000

43 50,000

46 100,000 50,000

49 200,000

52 400,000 100,000 50,000

55 800,000

58 1,600,000 200,000

61 3,200,000

64 6,400,000 400,000 100,000

Assume at retirement an 8% yield each and every year during retirement. It becomes clear that Option B delivers 400% more income than Option C. Option A appears impossible yet 25 funds have performed at this level over the last 15 years.

Investment considerations can and do have a significant impact on your standard of living in retirement!