Is the S&P 500 All You Need to Retire a Millionaire?
On the surface, it might seem like the S&P 500 would be all you need to retire a millionaire. After all, that index has an incredibly strong long-term track record, is fairly well diversified, and is made up of large, generally financially stable companies. With that line of thinking, you might believe a great lifetime financial strategy would be to simply dollar-cost-average into an S&P 500 index fund until you hit millionaire status. Then, simply retire and sell of shares of that fund when you need spending cash.
The key problem with that line of thinking is that stocks don't always go up, and indeed, the stock market does crash from time to time. Any retirement plan that relies 100% on stocks is incredibly risky. The key reason is that if you need to sell your stocks when they're down, you'll have that many fewer shares to participate in any recovery that follows. Because of that, you'll need more than just the S&P 500 to retire a millionaire.
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Source Fool.com
