How To Live The Best Life In Retirement

Have you ever heard of the Rule of 72?

It’s a formula for figuring out how long it’ll take to double an investment.1

That makes it a good estimator of something known as compound interest.

Compound interest is basically interest on your interest.

It’s a HUGE perk of saving early and consistently, especially in retirement.

How?

Well, with compound interest, you can grow your longer-term investments faster.

You can even insulate yourself a little better from unknowns like inflation and shifting markets.

Here’s how it works.

Let’s say you’ve invested $10,000 in a retirement account with a ~6% average rate of return.

Using the Rule of 72, you’d divide 72 by 6 to figure out how long it would take to double that $10K:

72 ÷ 6 = 12

So, it would take roughly 12 years to turn that $10K into $20K.

That’s the power of compound interest.

And you can take advantage of this in your retirement planning and savings to build a nest egg that will serve you well after you stop working.

Want to read more about how to enjoy a comfortable retirement without depleting your nest egg? Click here to check out the rest.

Sources:

1. https://www.cnbc.com/select/rule-of-72-what-it-is-how-to-calculate-it/