- 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 dependant on the type of investments
you select. From January 1970 to December 2005, the average
compounded rate of return for the S&P 500, including reinvestment
of dividends, was approximately 11.4% per year. 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.
- 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 2005.
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