1.6 mil won't be enough for you to retire at 50. At age 65 you might have about 6 mil and that's more like it especially when you factor in inflation.
Also, taxes will play a HUGE part of how much of your nest egg you actually get to keep.
If you are investing in non-retirement funds with post-tax money you will be taxed at capital gains rates not income tax rates. Long term capital gains rates are lower than income tax rates.
If the funds are invested in post-tax retirement accounts (ROTH accounts) the money you withdraw will TAX FREE. This is the best free-lunch any tax payer will ever get EVER.
If the funds are in tax-deferred accounts like regular IRAs or 401ks, the money taken out will be taxed as regular income. This will KILL you. Count on the government taking 1/3 of your nest-egg because that is exactly what will happen when you withdraw 401k/IRA funds.
That is the 64 dollar question.
I recommend you invest like Warren Buffett. Buy (high) quality and hold for decades (your time frame, by the way)
Buffett likes WFC, KO, AXP, PG, JNJ, IBM among others.
Many expect a "correction" of 10 to 20%, but even if it occurs the day after you "invest", your time frame should allow you to recoup, IF the American economy and stock market continue to chug-a-long.
I like ETF's, such as SPY, DVY, DIA, IBB, VIG, and IEO.
Good Luck!
I don't have this much but I'm wondering. Let's say I'm age 30 and want to retire at 50. What's a good way to invest this amount for the 20 years?
Since the stock market has had the highest returns compared to all other investments, would it be a good idea to put that money in stock mutual funds? How much do you think it would be by that time?
