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Investment Returns
Achieving your long-term investment goals involves various factors, including your initial capital, expected rate of return, inflation, taxes, and investment timeframe.
Rate of Return
The annual compounded rate of return you anticipate from your investments before taxes. For instance, the S&P 500® had an annual compounded return of 13.8% over the 10 years ending December 31, 2020. Historically, from January 1, 1971, to December 31, 2020, the average annual compounded return was approximately 10.8%. Note that these rates can vary significantly, and investments offering higher returns usually come with increased risk and volatility. Future returns are unpredictable, and fees associated with investment funds are not included in these figures.
Initial Investment
The total amount you have invested at the start, which will be used in this analysis.
Additional Investments
The amount you plan to contribute periodically to your investment. You can adjust this amount for inflation, meaning your contributions will increase annually based on the inflation rate.
Frequency of Contributions
How often you make additional contributions (e.g., weekly, bi-weekly, monthly, quarterly, or annually). The calculator assumes contributions are made at the beginning of each period.
Inflation Rate
The average long-term rate of inflation you expect. Historically, the U.S. Consumer Price Index (CPI) has averaged 2.9% annually from 1925 through 2020. The highest recorded CPI over the last 40 years was 13.5% in 1980, while the CPI for 2020 was 1.2%.
Tax Rate
The percentage of your investment returns that will be paid in taxes, assumed to be payable annually at the end of the year.
Inflation Adjustment
Select this option to adjust future investment amounts for inflation, reflecting how contributions will increase over time.
Show Values After Inflation
Choose this option to view investment totals adjusted for inflation, providing a perspective on the value of your investments in today’s purchasing power.
