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Retirement Income |
Use this calculator
to determine how much monthly income your retirement
savings may provide you in your retirement. Your
annual savings, expected rate of return and your
current age all have an impact on your retirement's
monthly income. View the full report to see a
year-by-year break down of your retirement savings. |
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Definitions
- Starting
balance
- Initial
balance that you have in
your retirement accounts.
Annual contributions
- The
amount you will contribute
to your retirement savings
each year. This calculator
assumes that you make your
contribution at the beginning
of each year. This should
reflect the total you save
toward your retirement.
This should include any
403(b), 401(k), or 457(b)
plans and your employer
contributions to these plans.
It should also include any
other retirement accounts
such as an IRA or a Roth
IRA and any retirement savings
in non-retirement accounts.
This calculator assumes
that you make one annual
contribution at the start
of each year, and any withdrawals
happen once per month at
the beginning of each month.
- Current
age
- Your
current age.
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
happened when you were actually
age 64.
- Rate
of return before retirement
- This
is the annual rate of return
you expect from your investments
before taxes. The actual
rate of return is largely
dependent on the type of
investments you select.
From January 1970 to December
2008, the average annual
compounded rate of return
for the S&P 500, including
reinvestment of dividends,
was approximately 9.7% (source:
www.standardandpoors.com).
During this period, the
highest 12-month return
was 61%, from June 1982
through June 1983. The lowest
12-month return was -39%,
which happened twice, once
from September 1973 to September
1974 and again from November
2007 to November 2008. 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 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.
- Rate
of return during retirement
- This
is the annual rate of return
you expect from your investments
during retirement. It is
often lower than the return
earned before retirement
due to more conservative
investment choices to help
insure a steady flow of
income. The actual rate
of return is largely dependent
on the type of investments
you select. From January
1970 to December 2008, the
average annual compounded
rate of return for the S&P
500, including reinvestment
of dividends, was approximately
9.7% (source: www.standardandpoors.com).
During this period, the
highest 12-month return
was 61%, from June 1982
through June 1983. The lowest
12-month return was -39%,
which happened twice, once
from September 1973 to September
1974 and again from November
2007 to November 2008. 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 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.
- Current
tax rate
- Your
current marginal tax rate
you expect to pay on your
taxable investments.
- Retirement
tax rate
- The
marginal tax rate you expect
to pay on your investments
at retirement.
- 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 2008. The CPI for
2008 was 4.0%, as reported
by the Minneapolis Federal
Reserve.
- Years
of retirement
- Number
of years you expect to live
in retirement.
- To
increase deposits with inflation
checkbox
- Check
this box if wish to have
your annual contribution
increased each year to keep
up with inflation.
- If
savings is tax deferred
checkbox
- Check
this box if your retirement
savings is being deposited
into a tax deferred account.
This includes an IRA, 401(k),
403(b), governmental 457(b),
variable annuity or other
tax deferred investment.
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| 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 cannot 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. |
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