How Do Taxes and Inflation Affect My Savings?
Both taxes and inflation can influence the amount of money you are able to save. Once taxes are calculated, the future value of your money is discounted by the inflation rate.
Enter the amount of money you currently have invested or have already saved.
Enter the amount of money you save each month to meet your goal.
Months to save
Enter the total number of months you plan to save. If you want to see the impact of inflation & taxes one and half years from now, enter 18 months.
Annual Rate of Return
Enter the annual rate of return you expect to achieve on your savings. This can be the rate you recieve on a savings account or the annual rate of return you achieve through investments.
Federal Tax Rate
Enter your federal tax rate. If you are using a tax free savings instrument, then enter 0%.
State Tax Rate
Enter your state tax rate. If you are using a tax free savings instrument for the state in which you reside, then enter 0%.
Enter the inflation rate you would like to use for this calculation. The historical average is 2-3%.
months, your investment will be worth the following:
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The Motley Fool's "Saving & Spending Center" provides a crash-course in how to save more money, including budgeting, short-term savings vehicles, saving for college, etc.
FinancialLiteracyMonth.com's Tools for Success section offers helpful worksheets for income, net worth, debt load, etc. Try these exercises to get one step closer to realizing your long-term financial goals.
About.com's Money In Your 20's section has great articles to get you thinking about ways to save better.
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