Definitions
Starting Amount
The starting balance or current amount you have invested or saved.
Years
The total number of years you are planning to continue your withdrawals.
Periodic Withdrawal
The amount that you plan on distributing (or withdrawing) from your savings or investment each period.
The investment period options include monthly, quarterly and annually. This calculator assumes that you
make your withdrawal at the beginning of each period.
Rate of Return
The annual rate of return for this investment or savings account. The actual rate of return is largely
dependent on the type of investments you select. From January 1970 to December 2004, the average
compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately
11.5 percent per year. During this period, the highest 12-month return was 64 percent, and the lowest was -39 percent.
Savings accounts at a bank pay as little as 1 percent or less. 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 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.
Compounding
Earnings on an investment's earnings, plus previous interest. This calculator allows you to choose the
frequency that your investment's interest or income is added to your account. The more frequently this
occurs, the sooner your accumulated interest income will generate additional interest. For stock and
mutual fund investments, you should choose 'Annual'. For savings accounts and CDs, all of the options
are valid, although you will need to check with your financial institution to find out how often interest is
being compounded on your particular investment.
Note: 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. | 
