Personal Resource Center

How to Approach Withdrawals from Your Portfolio At Retirement

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  1. Between 1926-2022, the S & P 500 has earned a 12% average rate of return per year using the arithmetic mean. This calculation fails to consider the effect of compounding. The geometric mean, which is sometimes referred to as compounded annual growth rate or time-weighted rate of return, during the same time period is approximately 10%. Geometric mean should be used to calculate portfolio investment returns. Back