Can you accumulate $1 million saving $14 per day?

Dissecting a claim from ABC News.

John Rekenthaler 30 August, 2018 | 5:00PM

Saturday, ABC World News aired an investment snippet on how Americans should prepare for retirement. The feature lasted just under a minute and a half.

Consequently, there was no time to explain the numbers. Such are mass communications, and you will find no protest from me. This column skips plenty of details itself. However, I do have enough room to explore the segment's most dramatic claim: That somebody who begins investing at age 23 can retire with $1 million by investing $14 daily into a "low-cost S&P 500 fund."

ABC's report assumes that future stock market returns are known. This supposition is clearly false, but necessary. A 90-second report cannot explain the assumptions that underlie the calculations, including how wealth projections vary with market forecasts. By the time the caveats are over, so is the dispatch.

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John Rekenthaler

John Rekenthaler  John Rekenthaler is Vice President of Research for Morningstar.

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