Are you on track to achieve your investing goals? Plenty of factors go into understanding whether you’ll be able to hit your targets, including your contribution rate, rate of return, taxes and inflation, among others. Forbes Advisor’s investment calculator is designed to help you see whether you’re making the right moves to reach your investing goals.
Below our investment calculator, you can find helpful explanations of the data we need, instructions on how to get the most from the calculator and answers to common questions.
How to Use This Investment Calculator
You’ll want to update our defaults with information that matches your own investment goals and financial situation. Here are more tips to help you get the most out of this calculator.
Include Your Income Tax Rates
While you may not like to think about taxes, you’re almost certainly going to lose some of your investment earnings to Uncle Sam. That’s why it’s helpful to include your federal, state and local tax rates in any investment growth calculations, to get a more realistic picture of what you’ll need to reach your goals.
If you aren’t sure which tax bracket you’re in, check out the federal tax guidelines. Not all states or local governments tax investment earnings, but if yours does you’ll want to include their tax rates—and see whether you’re able to deduct state taxes on your federal return.
To keep things simple, this calculator assumes that you’re cashing out the gains you make each year. You’ll then owe taxes on these earnings based on your current income tax rate.
Investing is a long game, and you shouldn’t cash out every year. That lets you benefit from long-term capital gains tax rates, which are lower but are only available if you hold investment for at least a year.
It’s also important to consider tax rate if you decide to hold your investments in a tax-advantaged retirement account, like an individual retirement account (IRA) or 401(k), which allow you to avoid paying taxes on the earnings you make within the account.
This calculator shows the balances you might have in a taxable account as well as a tax-advantaged account to illustrate the great savings you can accrue with tax-advantaged accounts.
Consider the Role of Inflation
Inflation is when prices rise across the economy and eat away over time at the purchasing power of your dollars. Preserving and growing your purchasing power is one of the main reasons to invest in the first place.
Between 1925 to 2020, the Consumer Price Index (CPI), a common measure of U.S. inflation, rose on average 2.9% each year. But the inflation rate fluctuates constantly, and some years have seen astronomically high levels of inflation, like the 13.5% rate seen in 1980.
By clicking “View Report,” you can see how much your investment’s future value would buy with today’s dollars. This may help you figure out if your current contributions will have you on track based on the current cost of your goals.
Make Your Deposits as Early as Possible
Time in the market is one of the most important factors in successful investing because it gives your money longer to compound and grow over time. By default, this calculator assumes that you’re making your contributions at the end of whatever cadence you decide to contribute.
For example, if you make monthly contributions, our calculator factors your investment growth based on deposits at the end of each month. But waiting even that small amount of time can cost you big over time.
Check the “Make Deposits At Beginning of the Period” box to compare how much more you might have if you simply invested your money as soon as you could each period. Over long periods of time, the differences can really add up, and that’s yet another argument for starting to invest as early as possible.
What Kind of Investment Account Do You Need?
There are two main types of investment accounts: taxable accounts and tax-advantaged accounts. The distinction is important because you may be able to deduct any contributions you make using a tax-advantaged account, like a 401(k) or IRA, and you’ll also generally be able to postpone or avoid paying taxes on any investment gains that occur while your money remains in the account.
This calculator presents both scenarios—investing in a taxable or a tax-advantaged account—so you can see the impact choosing either type might have on your returns.
Note, however, that just because you might gain more from a tax-advantaged account doesn’t mean it’s always the right choice for your dollars. If you’ll need the money before retirement, for instance, you won’t want to lock it up in a 401(k) or IRA, which may charge penalties for early withdrawals. Instead, you’ll want a taxable brokerage account that you can tap at any time.
Investment Goal Calculator FAQs
How Can I Start Investing?
You can start investing the old fashioned way, with a brokerage account, or with an investment app. You’ll typically need to provide some personal information, like your name, age, address, Social Security number and income, and hook up a bank account. Be sure to check out our lists of the best brokerages and best investment apps for tips on where to get started.
How Much Money Do I Need to Start Investing?
You can start investing with $5 or less through some major brokerages, like Charles Schwab and Fidelity, as well as micro-investing apps, like Stash and Robinhood. You may also consider a robo-advisor, which will design and manage a portfolio of low-cost, diversified investments for you.
What Should I Invest In?
You’ll likely want to invest in a diversified portfolio of many investments, like index funds and exchange-traded funds (ETFs) that aim to copy the performance of major market indexes, like the S&P 500.
This helps you invest safely by not putting all of your investing eggs in any one basket. These index funds also tend to be the lowest cost investments you can find and historically have offered the same, if not better, returns than funds run by professional investors or stocks picked by individual investors.
How Can I Make Money With Stocks?
The key for most people making money with stocks is investing in a diversified portfolio of index funds and ETFs for the long term. That means years, if not decades. This gives you time to recover from any short-term market dips you may experience.
If you don’t have at least a few years on your investing timeline, you may be better served by a high-yield savings account or certificate of deposit (CD).
What Kind of Investment Account Should I Use?
Not all investment accounts are created equal. Different kinds are better suited for different goals. For retirement savings, you’ll probably want an IRA or 401(k) to take advantage of their tax benefits. Similarly, if you’re aiming to prepare for your child’s college tuition, a tax-advantaged 529 may be helpful. But if you have another goal in mind, particularly one that you plan to accomplish before you reach retirement age, you may turn to a taxable investment account.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
