Some years you will have a lot of gains, some years you will end the year flat, and some years you will lose money. From year to year, the rate of return that your account experiences will vary.
Projections of how much your money could grow to assume that you'll do the same thing consistently. Using a calculator, you can determine just how much by factoring in how much you've already saved, how many years you have left until you hit your millionaire goal, and your new rate of return.
You can compensate for this lower return by adjusting your annual contributions. Doing this will decrease your volatility, but you will probably earn a lower rate of return. While this type of portfolio may be suitable for you when you are young, reducing your stock exposure steadily as you near retirement may be prudent. You can potentially achieve this rate of return by investing in a portfolio of 100% equities. If you save $5,250 a year starting at age 25 and earn 10.3% each year on average, your account could grow to more than $1 million by the time you are 55. Starting young is one of the best ways of snagging the title of "The Millionaire Next Door." If you can invest the money that you save, investment returns combined with the power of compound interest can grow your assets exponentially.
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