8% roth Ira? Pls explain

[dgcoupe]

I notice a lot of things evolve the 8% when i read about roth IRA... Is that the award given if u dont touch it till the certain age when u invest in Roth IRA?

for an ex guy talked about investing 5k for 40 years end up with 200,000 then by 65 he would have like 1.3 million.

[kork13]

8% is often used as an estimated average return for investments invested primarily in stocks (say, 80%-90% stocks/10%-20% bonds). Over time, you get compounding returns thanks to the rise in an your portfolio's value, and reinvested interest/dividends. It's only a rule of thumb to use for making generalizations. Some years you'll do better, some years you'll do worse. But over time, your portfolio will generally increase in value, and the 8% figure can be used to estimate that future value.

[snshijuptr]

I have heard that the new estimate to use for stocks is 6% growth over the long term. Of course those same pundents might change their mind about the "long term" growth rate in 5 years.