Taxes and inflation calculator:
How much will my investment be worth?
The value of your investment can be affected by both taxes and inflation. Use this calculator to estimate their impact. Enter your information in the fields and then click on Calculate to see year-by-year and total effects of taxes and inflation on your investment. This calculator assumes that taxes are paid on investment earnings each year. Retirement plan earnings may be tax-deferred or, for qualified Roth account withdrawals, tax-free.
- Amount currently invested
- The amount you have invested at the start of the period.
- Monthly contributions
- The amount you will invest at the beginning of each month.
- Years to invest
- The number of years you plan to invest.
- Hypothetical annual rate of return
- The expected pretax annual return on your investments. Since 1926, the average annual total return for the S&P 500, an unmanaged index of large U.S. stocks, has been nearly 10%. Investments that offer the potential for higher rates of return also come with a higher degree of risk. Hypothetical rates of return are for illustrative purposes only and are not intended to portray actual results. Actual rates of return will vary over time. Past results are not predictive of results in future periods.
- Federal income tax rate
The marginal federal tax rate you expect to pay on your earnings. Use the table below to estimate your current tax rate.
Filing status and income tax rates for 2013
This information is subject to change by the IRS.
Tax rate Married, filing jointly or qualified widow(er) Single Head of household Married, filing separately 10% $0–$17,850 $0–$8,925 $0–$12,750 $0–$8,925 15% $17,851–$72,500 $8,926–$36,250 $12,751–$48,600 $8,926–$36,250 25% $72,501–$146,400 $36,251–$87,850 $48,601–$125,450 $36,251–$73,200 28% $146,401–$223,050 $87,851–$183,250 $125,451–$203,150 $73,201–$111,525 33% $223,051–$398,350 $183,251–$398,350 $203,151–$398,350 $111,526–$199,175 35% $398,351–$450,000 $398,351–$400,000 $398,351–$425,000 $199,176–$225,000 39.6% $450,001
- State income tax rate
- The marginal state tax rate you expect to pay on your investment.
- Expected inflation rate
- What you expect for the average inflation rate. Over the past 50 years, the Consumer Price Index, a common measure of inflation, averaged about 4% a year.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional or downloaded and should be read carefully before investing.
The calculator deducts income taxes from earnings on an annual basis using the income tax rates that you specify. This will tend to understate the performance of the taxable account in circumstances where long-term capital gains and qualified dividends, which are currently taxed at lower rates than ordinary income, are a component of investment returns, as is the case for investments with significant equity holdings.
This calculator was developed by KJE Computer Solutions, which is not affiliated with American Funds. It is intended for use in making a rough estimate of the effects of taxes and inflation on your investments. We do not guarantee the accuracy of the results or their relevance to your particular circumstances. We encourage you to seek the assistance of your financial professional.
Copyright 2013 American Funds Distributors, Inc.