How Much You Would Have Had To Invest In Microsoft 10 Years Ago To Retire Today

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If you had seen the potential in Microsoft 10 years ago, would you have enough to retire today? Microsoft’s stock has grown significantly in the last 10 years. 

Any money you invested in Microsoft 10 years ago would be worth more than 10 times as much right now. So how much would you need to have invested in Microsoft in 2014 to retire now?

How Much Money Do I Need To Retire?

The easiest way to calculate how much money you need to retire is to use the 4% rule. The 4% rule is a retirement strategy published by financial advisor Bill Bengen in 1994. According to his research, retirees who withdraw 4% of their retirement fund annually are unlikely to run out of money during their lifetimes. The research was done for a theoretical portfolio consisting of 50% bonds and 50% stocks. 

To find the amount of money you need for retirement, you simply divide your current annual income by 4%. This means that if your annual income is currently $85,000 and you would like to maintain the same standard of living during retirement, you would need to save at least:

$85,000/0.04 = $2,125,000

The latest Census placed the annual median income in the U.S. at $75,149 in 2022. Adjusting for inflation, that would be $82,948 in 2024. We can take this number and plug it into the 4% rule to find out how much money you would need to save to maintain a median U.S. income in retirement:

$82,948/0.04 = $2,073,700

This means that the average American would need to save around $2.1 million for retirement to maintain the same standard of living. 

It should be noted that some experts believe the 4% rule may not always be accurate, with different financial advisors recommending either riskier or more conservative strategies. Bill Bengen himself said that the 4% rule should be used as a guideline, not an ironclad rule. 

Every individual will have different expenses and assets and will need to calculate their retirement requirements themselves. However, the 4% rule can be good for calculating a ballpark figure to start with. Before deciding on an amount for your retirement, it can be a good idea to talk to a financial advisor and consider your options.

How Much Has Microsoft Grown in 10 Years?

As of March 28, 2024, the current price of Microsoft’s stock is $420.72. Ten years ago, at market close on March 28, 2014, Microsoft’s stock was trading at $40.30 per share. This means that $10,000 invested in Microsoft in March 2014 would be worth $104,397.02 today.

So how much would you need to have invested in Microsoft 10 years ago to retire today? Let’s take our previous estimate for the savings you would need to maintain the median U.S. income in retirement and compare it with the 10-year return for Microsoft’s stock:

 $40.30/$420.72 * $2,073,700 = $198,635.93

This means that if you had invested $198,635.02 in Microsoft stock in 2014, you would have enough in your retirement account to maintain the median American income for the next 30 years or so.

While this can be an interesting thought experiment, investing all or most of your savings into a single company can be risky. There have been many companies that have lost a significant portion or all of their value within the past 10 years. Putting all of your money into a single business can mean losing out on potential growth from other investments or losing a significant portion of your savings. To be safe, many financial experts instead recommend investing in an index fund that tracks the growth of the whole market. 

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