Your net worth is the value of all of your assets, minus the total of all of your liabilities. Put another way, it is what you own minus what you owe. If you owe more than you own, you have a negative net worth. If you own more than you owe you will have a positive net worth. This calculator helps you determine your net worth and estimates how it could grow (or shrink) over the next ten years.
401(k) Savings Calculator
A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 401(k) are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your 401(k) account which can range from 0% to 100% of your contributions. The combined result is a retirement savings plan you cannot afford to pass up.
Definitions
- Annual salary
- This is your annual salary from your employer before taxes and other benefit deductions. Since your contribution and company match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.
- Percent to contribute
- This is the percentage of your annual salary you contribute to your 401(k) plan each year. Most employers permit employees to contribute up to 15% of their salary to a 401(k).
- Annual contribution limits
- Your total contribution for one year is based on your annual salary times the percent you contribute. However, your annual contribution is also subject to certain maximum total contributions per year. The annual maximum for 2010 remains at $16,500. Starting at age 50 or older, a "catch-up" provision allows you to contribute an additional $5,500 into your 401(k) account. It is also important to note that employer contributions do not affect an employee's maximum annual contribution limit.
It is important to note that some employees are subject to another form of contribution limitations. Employees classified as "Highly Compensated" may be subject to contribution limits based on their employer's overall 401(k) participation. If you expect your salary to be $110,000 or more in 2010 or was $110,000 or more in 2009, you may need to contact your employer to see if these additional contribution limits apply to you.
- 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 401(k). So if you retire at age 65, your last contribution happened when you were actually 64.
- Current 401(k) balance
- The starting balance or current amount you have invested or saved in your 401(k).
- Annual rate of return
- The annual rate of return for your 401(k) account. This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the type of investments you select. For example, from December 1999 to December 2009, the average annual compounded rate of return for the S&P 500 was -0.6%, including reinvestment of dividends. From January 1970 to December 2009, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and 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.
- Annual salary increase
- The annual percentage you expect your salary to increase. We assume that your salary will continue to increase at this rate until you retire.
- Employer match
- An employer match is in addition to your annual contributions. It is based on a percentage of your annual contributions. This range can be anywhere from 0% to 100%.
For example, let's assume the employer matches 50% of the employee's contributions up to 6% of their salary. The employee earns $100,000 per year and contributes 10%. The results would be:
- $10,000 from the employee
- $3,000 from the employer (which is 50% of $6,000 or 6% of the annual salary)
- Total: $13,000
Please read the definition for "Employer maximum" for a detailed description of maximum employer matching contributions. It is also important to note employer contributions do not affect the maximum amount allowed to be contributed by an employee.
- Employer maximum
- This is the maximum percent of your salary matched by your employer regardless of the amount you decide to contribute. For example, let's assume your employer has a 50% match, up to a maximum of 6% of your annual salary. If you have an annual salary of $25,000 and contribute 6%, your annual contribution is $1,500. With a 50% match, your employer will add another $750 to your 401(k) account. If you increase your contribution to 10%, your annual contribution is $2,500 per year. Your employer match, however, is limited to the first 6% of your salary and remains at $750.
|
DEFINITIONS
Annual Asset Growth: Average annual rate you expect your assets to increase (or decrease if negative) in value.
Annual Liability Growth: Average annual rate you expect your liabilities to increase (or decrease if negative) in value.
Home: Current value of your home. This should be as close as possible to the actual market value of your home. If you have owned your home for a number of years, the current market value could be significantly higher than your original purchase price.
Other Real Estate: The value of any other real estate you may own. Include second homes, undeveloped land, rental property or any commercial buildings you may have an interest in. As with your home, use the actual market value of this real estate.
Automobiles: This is the total value of all automobiles that you own. Do not include any leased vehicles.
Other Vehicles: If you own any other vehicles, such as RVs, campers or collectibles, enter them here.
Jewelry: The value of any jewelry, gems or precious metals such as gold. If you have owned these items for a number of years they may have appreciated in price, so remember to use the current market value.
Household Items: The value of your household goods and items. This would include items such as furniture, home electronics, silverware, etc.
Retirement Accounts:The current total balance of your retirement accounts. This should include IRAs, 401(k) savings, SEP IRAs, variable annuities and any other retirement savings you may have.
Bonds:If you own any Treasury, municipal or commercial bonds, that are not part of your retirement accounts, enter the total here.
Stocks:If you own any individual stocks, that are not part of your retirement accounts, enter the total here.
Mutual Funds:If you own any mutual funds, that are not part of your retirement accounts, enter the total here.
Cash Value of Life Insurance:Some life insurance has a cash value. This is true for whole life and universal life policies. Term life policies, on the other hand, have no cash value. If you have life insurance with a cash value, enter the total here. Remember, this should be the cash value of the policy, not the amount paid out if you were to collect on the policy.
Savings Bonds:If you own any savings bonds enter the total here.
Checking and Savings:The current total balance of your checking and savings accounts.
Cash:If you have any other cash, enter the total here.
Other:If you have any other assets of value, you can enter the total here.
Home Mortgage Principal:This is the current principal balance remaining on your mortgage. This is the amount that you would have to pay to own your home free and clear.
Other Mortgage Principal:This is the current principal balance for any other real estate mortgages you may have. This includes mortgages on rental property, undeveloped land, commercial property or any other real estate.
Auto Loans:Total amount you currently have outstanding on your auto loans.
Student Loans:Total amount, if any, that you currently owe in college or student loans. You should enter the total outstanding even if these loans are currently in deferment.
Credit Card Debt:Your total credit card debt.
Other Loans:Your total credit card debt.
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 can not 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. Calculators provided by KJE Computer Solutions, LLC.
