This is the expected annual return on your investments while taking withdrawals. Since 1926, the average annual total return for the S&P 500, an unmanaged index of large U.S. stocks, has been about 10%.
Investments that offer the potential for higher rates of return also come with a higher degree of risk. You may want to choose a more conservative rate of return in retirement. Without a salary, retirees often depend on stable investments that offer lower potential growth rates in exchange for lower potential risk of loss.
The analyzer compounds earnings monthly at a rate of 1/12 of the annual return, which will result in a slightly higher annual return. Hypothetical rates of return are for illustrative purposes only and are not intended to portray actual results. Actual rates of return will vary over time. Past results are not predictive of results in future periods. If you take a lump-sum distribution, your entire account is withdrawn when you retire, so a return in retirement is not applied.