1 Vanguard Index Fund Could Turn $450 Per Month Into a $905,200 Portfolio That Pays $16,400 in Annual Dividend Income
Young adults with median earnings can build sizable portfolios that pay a hefty amount of passive income by retirement.
1 Vanguard Index Fund Could Turn $450 Per Month Into a $905,200 Portfolio That Pays $16,400 in Annual Dividend Income
Overview
The median annual income for full-time workers aged 25 to 34 was $59,280 during the first quarter, according to the Labor Department. That means after-tax earnings would be about $45,100 in the worst-case scenario. Financial planners usually recommend saving 20% of after-tax income for retirement, which would be $9,020 per year (or about $750 per month) for the median worker.
Even a portion of that figure, invested wisely, could build a sizable portfolio over time. History says $450 per month in the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) could be worth about $905,200 after three decades. And the portfolio could initially generate about $16,400 in passive income per year.
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Originally published at www.fool.com.
