RetireJapan

RetireJapan wrote: ↑Mon Mar 15, 2021 11:55 pm You could just ignore it too (not being facetious). It's not very important in the greater scheme of things

Yes, I echo this. There is not actually enough information in the formula in the image I linked to reproduce the 運用利回り calculation exactly. But I got pretty close for my iDeco with some reasonable conjectures.

You are investing sensibly for your retirement with the two funds you hold in your iDeco. There's no benefit in getting hung up on the details of this slightly obscure 運用利回り metric, unless you enjoy this kind of thing

There's no benefit in getting hung up on the details of this slightly obscure 運用利回り metric, unless you enjoy this kind of thing

The calculation they use seems to be designed to show the highest percentage possible, give the appearance of rapid growth, while providing no real useful information. It is best ignored.

Established wrote: ↑Tue Mar 16, 2021 1:34 am The calculation they use seems to be designed to show the highest percentage possible, give the appearance of rapid growth, while providing no real useful information. It is best ignored.

Yes, I thought the same, although I have lived too long in Japan to be able to say things this directly any more

Will add though, if they use your iDeco value from one year ago for C_1 in the calculation of 運用利回り, it should trend towards the actual annual growth figure the longer you have been contributing to iDeco.

TBS wrote: ↑Tue Mar 16, 2021 1:14 am

RetireJapan wrote: ↑Mon Mar 15, 2021 11:55 pm You could just ignore it too (not being facetious). It's not very important in the greater scheme of things

Yes, I echo this. There is not actually enough information in the formula in the image I linked to reproduce the 運用利回り calculation exactly. But I got pretty close for my iDeco with some reasonable conjectures.

You are investing sensibly for your retirement with the two funds you hold in your iDeco. There's no benefit in getting hung up on the details of this slightly obscure 運用利回り metric, unless you enjoy this kind of thing

Haha! Strangely I do enjoy this kind of thing. It's my crime and my punishment.

I should really just let it be and enjoy the present, but I often see myself forecasting too much into the future. Something I hope to rectify as I get older... and maybe wiser?

The past performance is no guaranty of future performance, but if you use the XIRR function it tells you your performance to The Last Date and Total value in your table (probably today's date and actual value).

You could extrapolate that into the future with future contributions and an estimated future Total Value.

A simple rule of the thumb is the Rule of 72 (It is only an approximation that holds for low interest rates)
If you divide 72 by the Rate of Return (5% or 0.05x100) - (1+0.05)^n = 2
72 / 5 = Approx 14.4 Years to double your money - (1+0.05)^14.3 = 2
72 / 10 = Approx 7.2 Years to double your money - (1+0.1)^7.3 = 2
72 / 30 = Approx 2.07 years to double your money - (1+0.3)^2.7 = 2

So the XIRR finds the value for n that makes the accumulation of all the Payments In = the Payment Out (i.e. Today's Value, or the future projected value...)