What might it take to save $1 million? 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. Click View Report to look at 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. From January 1970 to December 2006, the average
compounded rate of return for the S&P 500, including reinvestment of
dividends, was approximately 11.5 percent per year (source:
www.standardandpoors.com). During this period, the highest 12-month return
was 61 percent, and the lowest was -39 percent. Savings accounts at a bank
pay as little as 1 percent 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. It is not possible to invest directly in an index, and the
compounded rate of return noted above does not reflect additional sales
charges and fees that funds 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), which has a
long-term average of 3.1 percent annually, from 1925 through 2006.
Information and interactive calculators are made available to you as
self-help tools for your independent use and are not intended to provide investment advice. We
can not and do not guarantee their applicability or accuracy in regards to your individual
circumstances. All examples are hypothetical and are for illustrative purposes. We encourage
you to seek personalized advice from qualified professionals regarding all personal finance
issues.
Note: The above information is not intended or written to be used as
legal or tax advice. It was written solely to support the sale of annuity products. As a
taxpayer, you cannot use it for the purposes of avoiding penalties that may be imposed under
the tax laws. You should seek advice on legal or tax questions based on your particular
circumstances from an independent attorney or tax advisor.
