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Re: AARP EMAIL RE: DO I BELIEVE IT SHOULD BE EASIER TO SAVE?

@StephenR101808 I am not sure if you are addressing saving for a short term purpose (i.e, buy furniture, go on vacation,etc.) or a long term purpose (i.e., retirement, etc.). If long term, it is helpful to use competitive measurement over the time periods that you measuring. I am guessing that you may have rolled over your interest in an employer sponsored defined contribution plan to an Individual Retirement Account (IRA) since you stated that upon retirement you gained full control. I would not confuse the past five (5) years of stock market performance with longer term stock market returns. I am providing a link that will help develop annual returns for the S & P 500 over various periods of time. https://dqydj.com/sp-500-return-calculator/ This calculator is easy to understand inasmuch as it provides two returns; namely, with and without dividend reinvestment. You may also indicate whether you want to include the adjustment for inflation. I use the S & P 500 as a benchmark for comparison since 80% or more money managers (including fiduciaries) do not beat its returns. For example,  I used the period January 2001 to January 2021 which is the last 20 years under three different administrations and the inflation adjusted results are 3.265% w/o dividends reinvested and 5.271% with dividend reinvested. If you remove the inflation adjustment, the returns are 5.358% and 7.406%, respectively. So, brokers quoting you returns for 20 years greater than the above percentages may be in that 20% or so folks that beat the market or they may be using shorter term performance data (i.e., 1 to 5 years, etc.) to gain your business. Remember, you can invest in the S & P 500 via mutual funds or exchange traded funds (ETFs) commission free with most brokers. Taxes are another issue that need to be addressed in an individual basis. Currently, you do not pay federal income taxes on qualified dividends or long term capital gains if held outside a tax deferred account and you are in the 12% tax bracket or less.

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