Acceptable returns

One of the main issues when planning your retirement is calculating a reasonable assumption for investment returns. However we cannot based our figures on past performance this time. Conditions have changed. Public pension funds are still using an annual yield of 8% which is absurd.

Long-term returns on the stock market mainly depend on the initial point. That is the reason we are always concerned about using multiple entries. The stock market on a normalized basis is priced pretty high nowadays. It was incredibly high some years ago, though. Therefore, we are expecting below-average yields.

A blended mix of bonds, stocks, real estate, and non-traditional tools might lead us to an average of 4% instead of the commonly assumed 8%.