Definitions

Current age
Your current age.

Age of retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement savings. So if you retire at age 65, your last contribution happened when you were actually age 64. This calculator also assumes that you make your entire contribution at the end of each year.

Household income
Your total household income. If you are married, this should include your spouse's income.

Current retirement savings
Total amount that you currently have saved toward your retirement. Include all sources of retirement savings such as personal pensions, IRA's and annuities.

Rate of return before retirement
This is the annual rate of return you expect from your investments after taxes. The actual rate of return is largely dependent 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 reinvestment of dividends, was approximately 11.4% 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 may 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.

Rate of return during retirement
This is the annual rate of return you expect from your investments during retirement, after taxes. It is often lower than the return earned before retirement due to more conservative investment choices to help insure a steady flow of income. The actual rate of return is largely dependent 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 reinvestment of dividends, was approximately 11.4% 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 may 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.

Years of retirement income
Total number of years you expect to use your retirement income.

Percent of income at retirement
The percent of your working year's household income you think you will need to have in retirement. This amount is based on your income earned during the last year you will work. You can change this amount to be as low as 80% and as high as 120%.

Expected salary increase
Annual percent increase you expect in your household income.

Expected rate of inflation
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%.

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.