Cool Million
What might it take to save one million dollars? This financial
calculator helps you find out. Enter in your current savings plan
and graphically view your financial results for each year until you
retire. Press the "View Report" button for a report that
helps you see when you might hit your cool million - and what you
might be able to do to possibly achieve this goal.
Definitions
- Your age
- Your current age in years.
- Millionaire target age
- The age you want to become a millionaire. For example, to find
out what it could take to be a millionaire by age 40, enter 40
here.
- Amount currently invested
- Total value of all of your current investments. Although you
could include your home and personal property in this amount - it
is a bit more accurate to include only your savings, retirement
accounts and investments.
- Savings per month
- The amount you will contribute each month to your investments.
This calculator assumes that all savings are added to your account
at the beginning of the 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 dependent on the type of
investments you select. The S&P 500 for the ten years ending on
December 31st, 2011 had an annual compounded rate of return of
2.92%, including reinvestment of dividends. From January 1970
through the end of 2011, the average annual compounded rate of
return for the S&P 500, including reinvestment of dividends,
was approximately 10.01% (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 0.25% 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). From 1925 through 2011 the CPI has a long-term average of
3.0% annually. Over the last 31 years highest CPI recorded was
13.5% in 1980.
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