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<blockquote data-quote="satellitedriver" data-source="post: 188062" data-attributes="member: 1664"><p>OK, I will try to explain it to you. It is called compounding interest. Since the benchmark used to gauge all funds is the S&P, I will use the long term average gain of the S&P for this illustration. </p><p>The S&P average is 11% over the past decades. So I will cut that interest in half to 5.5%. </p><p>$11,128.00 a year/ for 30 yrs at 5.5% equals $850,395.00.</p><p>If you take that amount and put it into annuity that pays 5.5%, you would receive $ 5,620.00 a month for 20 years.</p><p>I am being very conservative with the 5.5% yield over time. Boost that percentage up to 8% and the numbers grow exponentially.</p><p>I am no math scholar either, but I did learn simple grade school math.</p></blockquote><p></p>
[QUOTE="satellitedriver, post: 188062, member: 1664"] OK, I will try to explain it to you. It is called compounding interest. Since the benchmark used to gauge all funds is the S&P, I will use the long term average gain of the S&P for this illustration. The S&P average is 11% over the past decades. So I will cut that interest in half to 5.5%. $11,128.00 a year/ for 30 yrs at 5.5% equals $850,395.00. If you take that amount and put it into annuity that pays 5.5%, you would receive $ 5,620.00 a month for 20 years. I am being very conservative with the 5.5% yield over time. Boost that percentage up to 8% and the numbers grow exponentially. I am no math scholar either, but I did learn simple grade school math. [/QUOTE]
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