Model Your Financial Future
Find out the difference between Simple and Compound Interest! See how big an impact your tax rates and inflation have on your savings over time!
If you have already used our Becoming A Millionaire Calculator, you can use your targeted Expected Investment Return numbers in this calculator to see how to make that return happen!
Once you see how moving the rate of return affects your profits, try checking out our Compound Interest Calculator to see how the different types of compounding can have a big impact on the final return!
Make sure you click the VIEW REPORT button below!
Rate of Return
This is the annually compounded rate of return you expect from your investments before taxes. The actual rate of return is largely dependent on the types of investments you select. As Investopedia notes, *“The S&P 500 has delivered an average annual return of 10.33% since 1957, but when adjusted for inflation, the real return drops to 6.47%.”* (Source:
Investopedia). 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.
This is what you expect for the average long-term inflation rate. In the U.S., inflation is commonly tracked by the Consumer Price Index (CPI). To provide historical context, data from the World Bank shows that between 1960 and 2024, the average annual inflation was 3.76%. This period saw significant fluctuations, peaking at 13.54% in 1980 and reaching a low of -0.35% in 2009.
Source: World Bank, Inflation, consumer prices for the United States [FPCPITOTLZGUSA], retrieved from FRED, Federal Reserve Bank of St. Louis.