Does A Roth IRA Double Every 7 Years?

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   Tim Wilhoit

   Owner, Your Friend 4 Life, Brentwood TN

   The fact that it is a Roth IRA is irrelevant. The doubling of an investment has to do with the interest rate it is earning. If you use the Rule of 72, a formula by Albert Einstein, it is a great measurement of doubling money. The rule is simple, divide the number 72 by the interest rate you are receiving (72/10=7.2), and you will find the number of years it will take to double your money. It is called the Rule of 72 because at 10% interest, the money will double every 7.2 years. So in order to double your Roth IRA every 7 years it must be earning just over 10%. This is a very aggressive estimate with current interest rates around 1% to 2%.

   Answered on June 9, 2014

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