Who Will Win the Retirement Saving Race – The Tortoise or the Hare?

Tortoise and the Hare
This is a race between the tortoise and the hare. The tortoise is a savings vehicle earning a steady 5% interest, year after boring year. The hare is an investment account earning a much more exciting annual rate of return of 8% every year except one. The object of the game is to help the hare cross the finish line ahead of the tortoise, 10 years from now.

To play the game, click the blue box below. Type an amount of money to give the tortoise and the hare, and press ENTER.

Then click the brown box. Type a year for the investment account to sustain a 30% loss, and press ENTER. Every year except the one year you pick, the investment account will return 8%. But in the one year you select, the investment account will suffer a 30% loss. Why 30%? Because since 2000, the typical investor lost 45% or more — twice! It could happen again in 5 years, 10 years … or even tomorrow.

Which “loss year” will let the hare be ahead of the tortoise at the 10-year finish line? The 1st year? The 10th year? Some year in between? Choose different years and different starting amounts. Give it a try and have fun! Then click the link below the game, for an explanation. (But don’t do that until you’ve played the game!)

Note: Depending on your browser, you may need to click or tap each box a few times to be able to enter your numbers.

In the blue box below, enter how much money you choose for your initial gift to the tortoise and the hare. Type a number between 1 and 999,999. Then, in the brown box, decide which year the investment account will sustain a 30% loss instead of a 8% gain. Type a number between 1 and 10.


©2016 Hayward-Yellen 100 Ltd Partnership