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Saving for future
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Orfarmer
Posted 3/1/2024 09:14 (#10646618 - in reply to #10646474)
Subject: RE: Saving for future



Roanoke, IN
Boone & Crockett - 3/1/2024 08:50

AVP_Matt - 3/1/2024 07:44

Lol plus it would be pretty easy to say "hey I don't think I'll invest with them." To the OP, of the two funds I have the majority of my 401k in, one has a record of 16% the last 20 years and the other is 13% the last 30.
Non of that matters, what matters most is sequence of returns. I can show an example of 2 retirees drawing a 4% income from their nest egg over a ten year period, both averaged 16% over the time frame. Ones account is still gaining, the other is out of money, yet they both averaged 16% over the timeframe. Average returns are not the average of returns, so few seem to understand this concept.


Yes that may impact Ben somewhat with only 7 years in the market. After 38 years in the market, Arthur will be smiling no matter how rough the first couple years may be.

But this example is primarily focusing on the accumulation stage where generally smaller additions are made over a long period of time, not the retirement stage with 1 big chunk of $$$.

The point is a little bit early is always better than waiting on the next promotion or next life stage to invest. Maybe Ben completely bombs on timing and experience an unprecedented 50% drop in the market his first 2 years. Keep dropping 2,000 for an extra couple years and he is still ahead of Arrhur after 38 years.
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