Savings, Taxes, and Inflation | A Calculator
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Savings, Taxes, and Inflation

The value of your savings can be affected by both taxes and inflation. Use this calculator to determine how much your savings will be worth with this in mind. Javascript is required for this calculator. If you are using Internet Explorer, you may need to select to ‘Allow Blocked Content’ to view this calculator.
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 dependent on the types of investments you select. The S&P 500 for the 10 years ending Dec. 31st, 2012 had an annual compounded rate of return of 7.1%, including reinvestment of dividends. From January 1970 through the end of 2012, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: 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.

Federal tax rate
Your marginal federal tax rate.
State tax rate
Your marginal state tax rate.
Expected inflation rate
This is what you expect for the average long-term inflation rate. A common measure of inflation in the US is the Consumer Price Index (CPI). From 1925 through 2012, the CPI has a long-term average of 3.0% annually. Over the last 40 years, the highest CPI recorded was 13.5% in 1980.