Fun Fact of the Day, October 20, 2017

October 20, 2017

LUMP-SUM NEEDED - A present value (PV) amount of $1.96 million in a pre-tax retirement account is required today to fund a future payment stream for 30 years of $100,000 annually (with a 2.5% increase for maintenance of purchasing power) assuming that a 6% rate of return (ROR) can be maintained into the future.  If the ROR falls to 5% from 6%, the PV amount rises by 13% to $2.21 million.  If the ROR rises to 7% from 6%, the PV amounts falls by 11% to $1.75 million.  These examples are for illustrative purposes only and are not intended to predict the returns of any investment choices.  Rates of return will vary over time, particularly for long-term investments.  There is no guarantee the selected rate of return can be achieved. The performance of the investments will fluctuate with market conditions.  These calculations do not account for the payment of federal income taxes which would be due as a result of withdrawals from any pre-tax retirement account (source: BTN Research).

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