- Starting
amount
-
The starting balance or current amount you have invested or
saved. For this calculator, we assume your current savings is
earning your annual rate of return whether you decide to delay
your new contributions or not. For example, if you have a current
balance of $1000 and never make any new contributions, your
delayed and non-delayed results will be the same.
- Additional
contributions
-
The amount that you plan on adding to your savings or investment
each period. The options include monthly, quarterly and annually.
This calculator assumes that you make your contributions at
the beginning of each period.
- Years
-
The total number of years you are planning to save or invest.
- Rate
of return
-
The annual rate of return for this investment or savings account.
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.
- Years
to wait
-
The number of years you might wait before you begin saving.
We will then delay your new contributions for that number of
years.
- Cost
of waiting
-
The difference in your savings or investment balance between
your delayed and non-delayed plans.
- Required
contribution
-
If you wait to start saving, this is the amount you would need
to contribute each period to achieve the same result as starting
your savings plan immediately.
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