Investment Goal Calculator

How this calculator calculates

This calculator determines your estimated investment earnings over a determined time period. We calculate your total investment before and after taxes and inflation. Totals are rounded to the nearest dollar. 

A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2016 the CPI has a long-term average of 2.9% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. Please note that this calculator defaults to using a default 2.9% inflation rate.

This calculator assumes that deposits made to your investment are made at the beginning of the period. For example, if you are planning to contribute $1,000 annually, the calculator would assume this contribution was made at the beginning of the year. Making contributions at the beginning of each period allows your money to begin earning a return immediately increasing your return. 

Its important to remember that these calculations are hypothetical and future rates of return can’t be predicted with certainty and involve a multitude of outside factors, such as the type of investment and its risk and volatility. 

This calculator allows you to edit your federal and state marginal tax rates as well as select if your state taxes are deductible on your federal return. We default these inputs to common averages of a 25% federal marginal tax rate, and 6% state marginal tax rate. your federal marginal tax rate is calculated by the IRS, while state taxes vary widely.

Definitions

• Investment Goal: Your goal for the total value of your investment or investments.
• Years to save: The number of years you’d like to save for until reaching your investment goal. 
• Initial investment: Total amount you will initially invest or have currently have invested toward your investment goal.
• Age of retirement: Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement savings. So if you retire at age 65, your last contribution occurs when you’re actually age 64.
• Compound interest:  Interest on an investment's interest, plus previous interest. The more frequently this occurs, the sooner your accumulated interest will generate additional interest. You should check with your financial institution to find out how often interest is being compounded on your particular 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 types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2016, had an annual compounded rate of return of 6.6%, including reinvestment of dividends. From January 1, 1970 to December 31st 2016, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.3% (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 financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

  These calculations are hypothetical. 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 Separate Account investment funds and/or investment companies may charge.

• Expected inflation rate:  This calculator calculates based on the consumer price index’s long-term average fo 2.9% annually. 
• Federal Marginal Tax Rate: Your Federal marginal tax rate. Use the table below to assist you in estimating your federal tax rate.

• 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. Learn more about your state marginal tax rate here
• Deductible state taxes: Select if your state taxes are deductible on your Federal return. Generally speaking if you itemize your deductions on Schedule A of your Federal return you should check this box.