The S&P 500 has averaged around 10% in annualized returns over the last 90 years.
But you can’t plan your retirement based on best-case scenarios.
You should aim to spend around 4% of your nest egg per year in retirement, according to financial advisor Winnie Sun. That percentage can drop, however, based on several factors such as if your home isn’t paid off or if you have high health-care costs, Sun said.
This strategy also assumes that you have a balanced portfolio, focusing more on bonds and cash-type investments for your short-term needs. This allows the stocks in your portfolio to grow for the future, according to Sun.
Check out this video to see a few different case studies of how much spending money you’ll have if you retire on $1 million.
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