| Daniel Galli - David, the rate of return you can project for retirement accounts is directly related to how much risk you take in the account. Over the long run (decades) stocks have averaged 10%-12% while bonds have averaged approximately 5%. Cash has averaged slightly less than bonds. For a very conservative investment mix (all cash and government bonds) you might use an assumed rate of return of 4%. Mix in some stocks and bonds (approximately 60% stocks and 40% bonds and cash) and you might be able to project 7%-7.5%. However, different time periods can radically affect returns, as we have seen in this decade. The longer the time frame, the more chance your numbers will be met. I’m not sure how old you are, but for someone in their twenties or thirties, a mix of stocks, bonds and cash should allow for a projected return of 7% over the long run. |