If you have a financial advisor, then you may have a projection that hasn’t panned out in the last year, in fact it hasn’t done you any favors over the last ten years. As of this writing, the S&P 500 has lost money when you adjust for inflation over the last ten years. Directly off of Vanguard’s website, the Vanguard 500 Fund Investor (VFINX) has returned 2.81% annually, over the last 10 years, net of fees. This fund is a proxy for the S&P 500, the index of the largest 500 corporations. Over the last year it is down 13.12%. Most financial projections are based on retirement dollars growing at 8%. This is not an arbitrary number, but one that is based on assumption of taking out 5% annually, then an additional 3% to offset inflation.
In the current market environment, you only have two choices. Either you need to change your lifestyle and expectations of the future or reassess your financial strategy and create one that is diversified enough to hedge from market declines.
Wishing You Wealth in all its Greatest Forms
Alex
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