The Most Important Retirement Chart You'll Ever See
When planning for retirement, most people use some basic assumptions to determine how much they need to save each month in order to retire at the age they desire. The phrase "assuming a 7% real rate of return" may be considered redundant in the office of a financial advisor.
But basing your retirement planning on a steady 7% rate of return is fundamentally flawed. Everyone knows investing in the stock market doesn't return 7% year in and year out. Sometimes the market crashes. Sometimes it soars. And sometimes it doesn't really do much of anything.
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Source Fool.com