Quantcast
Are you getting the best rate from your broker?
Compare your broker's rates now to find out if you can save money

Choose your broker below
Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you
ALERT

Global Giant With 3M+ Customers Worldwide Added to Best Dividend Stocks List

Dividend logo

Your assumptions about how big your retirement nest egg should be are probably all wrong.

If it’s any consolation, even the best minds in the retirement business are probably getting it wrong too, according to AQR Capital Management, a well-regarded hedge fund.

Flawed Return Assumptions

The reason for the miscalculation, say the AQR researchers, is that the investment professionals running 401(k)s and other defined contribution plans are using assumptions about investment returns based on historical performance that is unlikely to occur in the future.

What they’re saying, essentially, is that the 7.5% annual real return on equities, and the 2.5% annual real return on bonds that have been earned over the past 65 years and that are now being used as return assumptions for the future, are very unlikely to be realized; we’ve got to assume that we’ll be making much less on our investments in coming years.

To read the Full Story, Go Premium or Log In

Popular Articles

Dividend University

What is Dividend Growth?

When it comes to income investing, there are five powerful formulas investors use to evaluate...

Dividend University

Most Watched Stocks List: A Ranking of Premium Members' Favorite Stocks

Dividend.com is constantly developing new and innovative tools to help income investors identify...

Premium Taxpapers
News

Tax Time Equals Giving Time

“Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for...