What % to enter in Calculator ??

[Ralphie]

I am looking at the Monthly Payments Based on a
Specific Dollar Amount Calculator.
The space that asks, "You would like your calculation based on an assumed annual earnings rate, (i.e., the rate you expect your TSP account to grow), indicate a rate of return (e.g. 5%). Otherwise, your calculation will not include projected earnings."
What is a SAFE percentage to put. I am in the L2020. Must I use 0 (zero) or is that TOO conservative ? Zero or 5% sure makes a big difference in the monthly payments to me.

[jayhawker]

The G Fund is going to return 4% to 5%. So, 5% is conservative.

Historically, the stock market returns an average of +/- 10% a year.

Something between 5% and 10% is appropriate I would think.

Ed.

[Ralphie]

Yes Then I guess 5% would be a SAFE estimate, I would rather be on the low side the try to expect too much.

[EW_ret]

John C. Bogle, Vanguard founder, would say expect a 6.5% return for a balanced portfolio of 60% equities and 40% bonds for next decade (2006-2016). The Lifecycle L2020 fund is about 63% equities and 37% bonds and cash as of today and its moving 1% of its equities to bonds and cash each year.

I reference Mr. Bogle's presentation (slide 12), "What's Ahead For Stocks and Bonds - And How to Be Sure You Earn Your Fair Share". It was presented at The Money Show, Los Vegas, NV on May 15, 2006. Its a PowerPoint slideshow that you can download from www.johncbogle.com (http://www.johncbogle.com/)

Here is the link to the PowerPoint slides: http://johncbogle.com/wordpress/wp-content/uploads/2006/06/Las%20Vegas%2006%20charts.pdf (http://johncbogle.com/wordpress/wp-content/uploads/2006/06/Las%20Vegas%2006%20charts.pdf)