The value of your savings can be affected by both inflation and taxes. Use this calculator to determine how much your savings will be worth with these two important variables in mind. Click the "View Report" button to get more information and a year-by-year savings schedule.

Definitions

» Years
The number of years you have to save.

» Monthly contributions
The amount you will contribute each month to your savings. This calculator assumes that you make your contribution at the beginning of each month.

» Amount currently invested
Total you have saved to date to be included in this analysis.

» Expected rate of return
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. 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% per year (source: www.standardandpoors.com). During this period, the highest 12-month return was 61%, and the lowest was -39%. 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. 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.

» Federal tax rate
Your marginal federal tax rate.

» State tax rate
Your marginal state tax rate.

» 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% 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.