STRUCTURED LEARNING FOR YOUR NEXT STEP

Compounding explained.

The accumulation that occurs when results remain in a balance and affect later results. Contributions, withdrawals, changing returns, costs, and taxes alter the path.

Planning

Compounding

The accumulation that occurs when results remain in a balance and affect later results. Contributions, withdrawals, changing returns, costs, and taxes alter the path.

Example: A positive second-year return can apply to retained first-year gains as well as principal.

Watch for: Treating a constant-rate illustration as a forecast.

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