Comments on: A Fully-Funded Roth IRA At Age 18 Could Net You 3.5 Million Dollars

By: Brett

Brett — Wed, 21 Jan 2009 23:56:01 +0000

For those who believe the 13% is not obtainable, think about this…l

Since 1929 stocks on average every decade have earned slightly about 10%. 2000-2009 the stock market has earned 0%. Never in the history of the stock market has there been back-to-back decades earning less than 10%. It is reasonable to believe with the idea of regression to the mean involved that stocks from 2010-2020 will earn near 20% if not more.

By: Cathy

Cathy — Sat, 03 Jan 2009 01:33:31 +0000

As a Realtor in Spokane, WA, I definately understand the benefits of a Roth IRA, especially for the use of purchasing real estate investments.

By: Jeff

Jeff — Sun, 28 Dec 2008 01:03:45 +0000

Great advice and the figures look astounding from such a small initial investment, although I’m aware that nothing is guaranteed when it comes to the stock market, especially consistent 13% yearly gains, and especially in a volatile market like today.

By: Kati

Kati — Tue, 16 Dec 2008 23:15:00 +0000

Thank you so much for this information – I’ll be 18 in late February, and only this morning was looking into Roth IRAs and high-yield savings accounts. I’ll be living on my own during college (which will be quite expensive enough, of course), but right now earn quite a bit per month in SS Survivor’s benefits, and while I won’t be able to invest QUITE $5,000 when I’m 18, I’ll have enough by the time I’m nineteen that this chart really helped me ballpark where I’ll be by the time I’m old enough to retire.

These tables are reassuring and encouraging, even at the 5% column, and I wish more people my age would start thinking about retirement now, or even about their finances in general (I’ve taken two finance/business classes throughout high school, and it’s truly frightening how many young people have no interest in their money, and are completely careless and ungrateful for it).

By: Bob Richards

Bob Richards — Mon, 30 Jun 2008 21:47:50 +0000

First–kudos on your focus on an 18-year-old. I hope their is at least one of them thoughtful enough to think about retirement. One other incentive for a young person–since ethe US government will raise taxes on his paycheck in order to provide services to us geezers, the fact that the money grows tax free in the Roth IRA (and hopefully congress won’t reverse that), he at least has an offset to the onerous taxes that will be levied on his paychec.

By: NCN

NCN — Tue, 24 Jun 2008 20:33:26 +0000

@Michael,
While I don’t give investment advice, I personally own several, low-fee index funds and ETFs.

And, personally, I don’t think that the chart is all that unrealistic…
NCN

By: Michael

Michael — Tue, 24 Jun 2008 20:27:55 +0000

This is an awesome article (though as others pointed out, it might be slightly unrealistic)… For a new college student, would you recommend putting my money into an index fund?

By: Catherine

Catherine — Mon, 23 Jun 2008 15:39:28 +0000

My government and politics teacher showed us these figures during my senior year in high school. It really motivated me to start my Roth IRA and I’ve been keeping it fully funded ever since! (Of course, that was only 6 years ago for me)

By: Roth IRA

Roth IRA — Fri, 20 Jun 2008 23:26:27 +0000

This is a great article. It is never too early to start saving for retirement and the power of compounding interest is well represented here.

By: imelda

imelda — Thu, 19 Jun 2008 15:01:35 +0000

I’m not great at math, so maybe someone can answer this question for me: as Ryan said, the average rate of return for the S&P 500 over the past 50 years was over 13%. Does that yield the same amount of money as a steady, yearly 13% increase?

I’m wondering because percentages can be tricky, i.e. if a stock goes down 50% one year, it then needs a 100% increase in value to go back to its original worth. Does that change the significance of 13% “average rate of return”? Or does average rate of return mean the equivalent of a steady, 13% annual rise in value? Thanks!!