- Investment goal
- Your goal for the total value of your investment or investments.
- Number of years to accumulate
- The number of years you have to save.
- Amount of initial investment
- Total you amount you will initially invest or have currently have invested toward your investment goal.
- Periodic contribution
- The amount you will contribute each period to your investment. You are also able to select whether you wish to have your contribution happen at the beginning or the end of the period.
- Investment frequency
- The frequency you will make regular contributions to this investment.
- Rate of return on investment
- This is the rate of return you expect from your investments. You are also able to select the frequency that earnings are compounded in your investment account. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2006, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% per year (source: www.standardandpoors.com). 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. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect additional sales charges and fees that funds 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 2006.
- Federal marginal tax rate
- Your Federal marginal tax rate. You can use the table below to estimate your marginal tax rate:
| Filing Status and Income Tax Rates 2007 |
| Tax rate | Married filing jointly
or Qualified Widow(er) | Single | Head of household | Married filing separately |
| 10% |
$0 - 15,650 |
$0 - 7,825 |
$0 - $11,200 |
$0 - 7,825 |
| 15% |
$15,651- 63,700 |
$7,826- 31,850 |
$11,201- 42,650 |
$7,826- 31,850 |
| 25% |
$63,701- 128,500 |
$31,851- 77,100 |
$42,651- 110,100 |
$31,851- 64,250 |
| 28% |
$128,501- 195,850 |
$77,101- 160,850 |
$110,101- 178,350
|
$64,251- 97,925 |
| 33% |
$195,851- 349,700 |
$160,851- 349,700 |
$178,351- 349,700 |
$97,926- 174,850 |
| 35% |
over $349,700 |
over $349,700 |
over $349,700 |
over $174,850 |
Source: http://www.irs.gov/formspubs/article/0,,id=164272,00.html
- State marginal tax rate
- Your marginal state tax rate. If your state taxes are deductible on your Federal return, we will take this into account when calculating your combined state and Federal marginal tax rate.
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