- Current retirement savings
- This is your current retirement savings. You
should include any savings or investments that are specifically for your
retirement. Be careful not to include amounts ear marked for other purposes,
such as your children's education.
- Monthly contributions
- The amount you will contribute each month to your
retirement savings. This calculator assumes that you make your contribution at
the beginning of each month. We also assume that this amount remains constant
until you retire.
- Years before you retire
- The number of years you have to save before your
retirement. If you are planning on retiring immediately, you should enter a
zero.
- Number of years in retirement
- The number of years you expect to spend in
retirement. If this retirement savings plan is intended to support you and your
spouse, make sure this is long enough years to account for your spouse's
potentially longer lifespan.
- Annual retirement expenses
- Your after tax retirement expenses. Since this
calculator assumes that you will be paying income taxes on interest as it is
earned, your expenses should be entered on an after tax basis. Your retirement
expenses are increased each year by your expected inflation rate if the
"Increase expenses with inflation" box is checked.
- Expected inflation rate
- What you expect for the average long-term
inflation rate.
- Rate of return before retirement
- This is the annually compounded rate of
return you expect from your investments before taxes. The actual rate of return
is largely dependant on the type of investments you select. For example, from
January 1970 to February 2003, the average compounded rate of return for the
S&P 500, including reinvestment of dividends, was approximately 11%.
Savings accounts at a bank 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 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.
- Rate of return during retirement
- This is the annual rate of return your
expect from your investments during retirement. It is often lower than the
return earned before retirement due to more conservative investment choices to
help insure a steady flow of income. For example, from January 1970 to February
2003 the average compounded rate of return for the S&P 500, including
reinvestment of dividends, was approximately 11%. Savings accounts at a bank
pay as little as 2% 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 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.
- Federal tax rate
- Your marginal federal tax rate.
- State tax rate
-
Your marginal state tax rate.
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