The amount you wish to have in savings at the end of this
Years to save
The number of years you have to save.
Amount currently saved
Total you currently have saved toward this savings goal.
The amount you will contribute each month to your investments.
This calculator also assumes that you make your contribution
at the beginning of each month.
Expected Rate of Return
This is the annually compounded rate of return you expect
from your investments. For the purposes of this calculator,
taxation is not factored into the results. If you pay taxes
on the interest, dividends or capital gains from these investments
you may wish to enter your after tax rate of return.
The actual rate of return is largely dependant on the
type of investments you select. From January 1970 to December
2007, the average compounded rate of return for the S&P
500, including reinvestment of dividends, was approximately
11.4% per year (source: www.standardandpoors.com). During
this period, the highest 12-month return was 61%, and
the lowest was -39%. Savings accounts at a bank can pay
as little as 1% or less.
It is important to remember that future rates of return
can't be predicted with certainty and that investments
that pay higher rates of return are generally subject
to higher risk and volatility. The actual rate of return
on investments can vary widely over time, especially for
long-term investments. This includes the potential loss
of principal on your investment. It is not possible to
invest directly in an index and the compounded rate of
return noted above does not reflect sales charges and
other fees that funds and/or investment companies may
Expected Inflation Rate
What you expect for the average long-term inflation rate.
A common measure of inflation in the U.S. is the Consumer
Price Index (CPI), which has a long-term average of 3.1%
annually, from 1925 through 2007. The CPI for 2007 was 2.4%,
as reported by the Minneapolis Federal Reserve.