Truth Test: Prudential TV Commercial on Retirement

Recently there have been several showings of a Prudential TV Commercial touting the power of compound interest savings for retirement.  This commercial infers that if you start saving at $45 per week, you will have enough on which to retire.

This depends greatly on what interest rate you can get for your investment.

Currently the highest interest your can get for savings is around 1.0% APY.  Most are giving 0.95% APY.  Using a $45 initial deposit and $45 per week thereafter for 40 years – this is what the TV commercial suggests.  Using a generic savings calculator, you will have $114,364 to retire on.

Any financial planner will tell you that this is a nice amount of spending money, but as a retirement fund in the year 2054, it is no way close to being sufficient to retire on.

I am not a financial planner but it seems to me that Prudential is not “telling it like it is”.

It would be more like this:  $450 initial deposit, 2.0% APY, $450 per week thereafter for 40 years.  This would give you $1,586,836 for retirement which may or may not be enough in the year of 2054.

Do not believe the commercial by Prudential.  Do your own research.  Hire your own financial planner.

Gary

About Gary

I am retired, but not tired. I still want to be valuable to others. I know that others are valuable to me. After looking back on six decades, I have asked myself this question: “What do I believe?” My mind filled up. My heart started beating faster. My spirit soared. I post blogs to share what my mind is working on, what my heart believes would help others and, what my spirit is communicating to me. What do I believe, you ask? Decisions dictate your path In love, not hate In tolerance, not prejudice In health, not sickness In wealth, not poverty In kindness, rudeness In happiness, not sadness In encouragement, not discouragement In faith, not doubt In courage, not fear I have been and will be challenged in each one of these beliefs, but the biggest belief is to stay positive and not turn negative. This belief helps me maintain all of the others.

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