Using ACalculator you can compare a taxable and tax-advantaged investment. A taxable income is one that pays tax on the investment earnings at the time of earnings withdrawal. In a different way, a tax-advantaged investment is one that pays no tax during earnings withdrawal on the earned money rather pays tax on the initially invested money on that same investment.
Annual rate of return
Your annual rate of earnings from the investments.As high return is subject to high risk, you can choose short-term investment opportunities to offset the time volatility and higher risk premium.
Years to contribute
Number of years you will contribute to the account.
Years of withdraws
Assuming all withdrawals are made at the beginning of withdrawal period, this number shows the years you will withdraw proceeds from the account.
Existing amount for this investment account.
Assuming all the transactions are made at the beginning of each period, this is amount of contributions to the account after the initial investment.
Choose weekly, monthly, bi-monthly, quarterly or other term to indicate your number of yearly contributions.
The number of times you will withdraw from the account in one year. There are weekly, bi-weekly, monthly, semi-annually, annually and other options to choose from.
Tax during contributions / withdrawals*
This is the amount of marginal tax rate approximated by the investor. For tax during contribution, you pay tax on the initial investment and not on the amount of withdrawal. Reversely, tax during withdrawals denotes the amount of tax you pay on the withdrawal amount and not on the initial investment.
Increase tax-deferred contribution by tax deduction savings
Checking this box enables the calculator to assume that your contributed amount to any tax-deferred account is tax deductible. The contribution amount is then increased gradually to the amount needed to make an equal net contribution as per the after tax investment contributions.