Comments on: A pension deficit disorder

By: Dragon

Dragon — Tue, 03 Jan 2006 01:54:50 +0000

It’s a rule of thumb. For simplicity’s sake, I’ll use couple of easy examples anyone can do in their head:

* 10% return on investment…
72 divided by 10 = 7.2

This means you double your money in 7.2 years, assuming a constant 10% return on your investment

* 7.2% return on investment…

72 divided by 7.2 = 10

At an assumed constant 7.2% return on investment, your money will double in 10 years.

Of course, no one is going to have a constant return on their money, which is why this is a rule of thumb. But it does demonstrate how your money can grow with compounded interest.

By: Roger

Roger — Mon, 02 Jan 2006 15:16:43 +0000

What’s the rule of 72?

By: Dragon

Dragon — Mon, 02 Jan 2006 12:46:56 +0000

A good reason not to be on company pensions! Roll them over to your own 401k. Speaking of investments, how many in the younger generations are saving? Answer: In my experience? Next to nothing. I haven’t yet seen one who knows what the “rule of 72″ is. This doesn’t bode well for us all.

By: Anj

Anj — Wed, 16 Nov 2005 15:24:51 +0000

Seriously smart title!!

So how does all of this affect OUR pensions?