Rule Of 72

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Rule Of 72


2011

By Ric Dalberri, Founder of Retirement USA

The rule of 72 gives you a rough approximation of how long
it will take your investment that earns compound interest, whether it is a
simple savings account or a complex investment to double. Divide 72 by the
annual percentage of interest you are now earning or expect to earn on your
investment. The result (answer) is the number of years it will take to double
your money.

For example: An investment that is going to give you a
return of 7% divided by 72 equals about 10 years & 3 months to double. This
is only an approximation. You must consider interest rate fluctuation taxes, etc.
Note: this is only an illustration, not predictions of performance. You should
always seek a licensed financial professional tax consultant, accountant or a
tax attorney.

Here is information you may want to consider when facing
Social Security.

Social Security replaces about 40% of pre-retirement earnings for the average
wage earner.

The amount of your retirement benefit is based on your earnings averaged over
most of your working lifetime. Each additional year you work adds another year
of earnings to your Social Security record. The additional earnings may result
in additional benefits to you. If you put off collecting your Social Security
benefit your benefit increases each year you delay. Social Security benefits
may be considered taxable if your countable income exceeds a certain amount.

There may be much more information you need to consider
before deciding when you will apply for your Social Security benefits. For more
information, contact the Social Security Administration at (800) 772-1213  or speak with a tax professional.