Social Security Investment Project Case Study

1423 Words 6 Pages
I am 25, and I look to retire at 65. I have $200,000 already nestled into a Roth IRA (so taxes are not a necessary consideration upon withdrawal); and I need to find the optimal way to build an investment portfolio in order to achieve my goal of retirement. My job’s income is slightly above average at $80,000 per year, and is not completely used to sustain my day-to-day living until retirement, so extra savings will be an accommodation. I am only allowed to contribute $5,500 a year to the Roth IRA, but that will compound with the money that is already invested for an exponential increase. With just contributed money, that will lead to an extra $220,000 available for reinvestment and gains of that kind. Moreover, the Social Security
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2 – Bomparola

Find something to work towards with $100,000.
I’m going to be working towards my child’s college fund, which is approximately $300,000 as he will obviously be going to Harvard. I have 18 years to come up with the money, which is more than enough time.

With this much time to raise so little money, a 5% increase will be plenty. And as I don’t want to take risks in my child’s education, I will be focusing on joint stocks, such as those mentioned in the first part of the investment project under the “Investing” category. Specifically, SDY will be the most important stock due to its average 4% dividends. It should take somewhere around half the 18 years I need to produce $300,000, so, I might consider having another child if the market doesn’t crash (minus taxes). Most of this part of the project is covered in the first part, the only thing that is different are the numbers, and the amount of risk that you are willing to include into the calculations. By using safe stocks instead of bonds, I am receiving not only the dividend 4% that would match the bond’s interest 4%, but also the capital increases of the stock over time; providing that the entire market doesn’t take a sudden

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