Unformatted text preview: -After 20 years @8%, $1.5 million @ 10.5% $2.35 million-After 25 years @8%, $2.2 million @ 10.5% $3.9 million Financial follies: life experience or ignorance Payment = $100/month, tax deferred/exempt S&P 500 index fund N=45 years, End Value= $1250000-But if wait until 50 to start monthly payment will be about 3000 and the risk will rise IRA (traditional) - takes pre tax money and leaves it until 70, build and gain interest/capital gain and pay no tax until take it out ROTH IRA- use after tax money now. Make $1250—pay $250 take $1000 to ROTH IRA, it grows, when take it out it is fax free S&P 500 Index fund- taxes money, buys 500 companies and decides their ranks in the market...
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This note was uploaded on 08/30/2010 for the course FINC 311 taught by Professor Murphy during the Spring '08 term at University of Delaware.
- Spring '08