Investment Goal Calculator
Use this calculator to determine if you are on track to reach your investment goals. You enter your investment goal, an interest rate, a marginal tax rate and the number of years until you need to reach your goal and our calculator will tell you if you are on track to reach that goal within your specified time period.
Definitions
Investment goal
Your goal for the total value of your investment or investments.
Number of years to accumulate
The number of years you have to save.
Amount of initial investment
Total you amount you will initially invest or have currently have invested toward your investment goal.
Periodic contribution
The amount you will contribute each period to your investment. You are also able to select whether you wish to have your contribution happen at the beginning or the end of the period.
Investment frequency
The frequency you will make regular contributions to this investment.
Rate of return on investment
This is the rate of return you expect from your investments. You are also able to select the frequency that earnings are compounded in your investment account. The actual rate of return is largely dependent on the type of investments you select. For example, from December 2000 to December 2010, the annual compounded rate of return for the S&P 500 was 0.899%, including reinvestment of dividends. From January 1970 to December 2010, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.05% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and 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 charge.
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). The CPI for 2010 was 2.4%, as reported by the Minneapolis Federal Reserve. From 1925 through 2010 the CPI has long-term average of 3.1% annually. Over the last 30 years highest CPI recorded was 13.5% in 1980.
Federal marginal tax rate
Your Federal marginal tax rate. You can use the table below to estimate your marginal tax rate:
Filing Status and Income Tax Rates 2011
Caution: Do not use these tax rate schedules to figure 2010 taxes. Use only to figure 2011 estimates.
| 10% |
$0 - 17,000 |
$0 - 8,500 |
$0 - $12,150 |
$0 - 8,500 |
| 15% |
$17,000 - 69,000 |
$8,500 - 34,500 |
$12,150 - 46,250 |
$8,500 - 34,500 |
| 25% |
$69,000 - 139,350 |
$34,500 - 83,600 |
$46,250 - 119,400 |
$34,500 - 69,675 |
| 28% |
$139,350 - 212,300 |
$83,600 - 174,400 |
$119,400 - 193,350 |
$69,675 - 106,150 |
| 33% |
$212,300 - 379,150 |
$174,400 - 379,150 |
$193,350 - 379,150 |
$106,150 - 189,575 |
| 35% |
over $379,150 |
over $379,150 |
over $379,150 |
over $189,575 |
Source: http://www.irs.gov
State marginal tax rate
Your marginal state tax rate. If your state taxes are deductible on your Federal return, we will take this into account when calculating your combined state and Federal marginal tax rate.
