Save Early, Retire Early
Chart of the Week for November 11-17, 1999
Investors who begin saving early earn the greatest advantage from compounding. Compounding is a method of interest calculation where, in each period, interest is calculated on both the principal and interest previously accrued. An investor who contributes $2,000 annually will have an ending balance of $98,846 after twenty years, assuming an 8% rate of return. After thirty years with the same level of contributions, the account value would be $244,692. Those additional ten years allowed the portfolio to increase by nearly 150%. The numbers can become substantially larger when annual contributions are increased using the same earnings assumptions.
The table below illustrates how time is the investor’s greatest tool. After 10 years, two-thirds of the dollars in the account are from contributions. But after 30 years, contributed dollars are just 25% of the account balance— the rest is from earnings.
This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.
Please consult both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.
The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.