How to Estimate a Future Rate of Return on Your Retirement Savings

I’m approaching retirement, and I’m using several online calculators to see how my nest egg might hold up. Each tool asks me to enter a “rate of return” on my investments. What’s a reasonable number? How do you figure out what your savings might earn in the future?

A critically important question. Many preretirees can do an adequate job of estimating what their expenses will look like after they leave the office. But predictions about our income largely depend on how our investments will perform. And here, most of us draw a blank. After all, it’s difficult enough to forecast what markets will do in the short term, never mind over the course of a 30-year retirement.