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Average growth of what? Large cap? Small cap? Age blend? That calculator asks you to put in growth. If you put in 11%, like it says, you're going to be disappointed in real life. I put in 11%, working from now until age 62, putting in $1200/month, and it says my current savings plus new savings will grow to $4.5MM, which is absurd. Even not adding in my current savings it says $3.1MM at $1500/month (which is about what I put away between 2 Roth IRAs and a 401k).
This calculator, using the same metrics of $1500/month, growing at 11%, for 26 years, not adding in my current savings, says my total will be $2.68MM, which is like $500k less than Dave Ramsey's site.
Dave Ramsey is full of shit in a lot of ways. I like the thought of minimizing debt, but his assumptions are always way high and get people's hopes up. Your investments probably won't grow at 11% per year in perpetuity, as your allocation will shift over time away from riskier small/mid cap stocks to more blue chips and bonds, decreasing your annual return later in life. The only way to get a much more accurate calculation is to use a Monte Carlo simulation, changing investment strategies and amounts over time.
I know it's simplistic, but I just can't stand a lot of these "financial advisors" out there, like Dave or Suze Ormann, who aren't actually registered and give shit investment advice most of the time.
For the record, yes I was registered at one time in life.
Thanks for the info.
When you retire, how much is expected rate of return? Currently, my rate of return is 9%.