Savings Calculator: Determine What it Takes to Save One Million Dollars
Millionaire-Maker
Savings - What will it take to save one million dollars
-- to become a millionaire? This financial calculator helps you find out. Enter in your current savings plan and graphically view your financial results and savings for each year until you retire. Press the "View Report" button for a report that helps you see when you might become a millionaire - and what you might be able to do to possibly achieve this goal. Protect your millions by investing in a series of Certificates of Deposits with different maturities, referred to as a CD Ladder.Millionaire-Maker - 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 savings and 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
savings and investments
. This calculator assumes that all savings are added to your account at the beginning of the month.
Expected Investment Rate of Return
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This is the annually compounded rate of return you expect from your savings and investments. For the purposes of this finance 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 2007, the average compounded rate of return for the S&P 500, including re-investment of dividends, was approximately 11.4% per year. During this period, the highest 12-month investmment return was 61%, and the lowest was -39%. Savings accounts at a bank can 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 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 2007. The CPI for 2007 was 2.4%, as reported by the Minneapolis Federal Reserve.