How Much To Become A Millionaire
What might it take to save $1 million? This financial
calculator helps you find out. Enter in your current savings plan and
graphically view your financial results for each year until you retire.
Press the "View Report" button for a report that helps you see when you
might hit your cool million – and what you might be able to do to
possibly achieve this goal.
Definitions
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
dependent on the type of investments you select. For example, from
December 1999 to December 2009, the average annual compounded rate of
return for the S&P 500 was -0.6%, including reinvestment of
dividends. From January 1970 to December 2009, the average annual
compounded rate of return for the S&P 500, including reinvestment
of dividends, was approximately 10.1% (source:
www.standardandpoors.com). 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 1% 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.
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 2009.
The CPI for 2009 was -1.0%, as reported by the Minneapolis Federal
Reserve.
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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