Re: Am I missing something here about planning for retirement???

Viking wrote:

> Pundits say to expect only 7% return from the market these years.

Stop right there.

"These years" may not be representative of long-term future years.

Historically, over the last 100 years, the long-term annualized total
return of the U.S. stock market has been around 11%. (A bit less for
large-cap stocks, a bit more for small-cap stocks.) That 11% growth
rate accurately reflects the growth and advancement of the U.S. economy
in the last 100 years.

That's 4% more per year than your 7%, which compounded over 30 years
makes a tremendous difference.


> So tell me: is the market way a bust as far as saving for retirement
> goes for the vast majority of people???

Logically, that could not be the case, because traditional
defined-benefit pension plans were also invested in the stock market.
And as long as they were broadly diversified, they remained solvent.

Whether you have a defined-benefit pension plan invested in the stock
market, or you have a defined-contribution 401(k) or 403(b) plan
invested in the stock market, the principle is the same: You're betting
on the long-term future of the American economy. While no one can
predict the future, over the last 100 years, it's proven to be a better
bet than betting on the future of other world economies. The U.S. has
survived intact thru a major depression, two world wars, stagflation,
the advance and then collapse of Communism, and unprecedented
technological change. America has never been conquered in its history,
it has never had to surrender to a foreign country on the battlefield,
and it has only been invaded twice: the War of 1812 and 9-11.

Other than Britain, what other nation has that kind of long-term track
record?



--
Steven D. Litvintchouk
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