A savings calculator helps you figure out how much you need to save regularly to reach a specific financial goal within a defined time frame. It helps bring clarity by turning a vague goal into a structured, achievable target.

How does the savings calculator work?

Step 1: Enter your current savings balance

To start, enter the current balance in your checking/savings account. For example, if you currently have $3,000 saved up, enter the said amount.

Step 2: Input your desired savings goal

Next, enter the target amount you are saving for. For example, if you are saving for a down payment toward a home, say $10,000, enter the said value.

Step 3: Enter your before-tax return on savings (-12% to 12%)

Before-tax return on savings is the amount your savings earn before any taxes are deducted. For example, if your savings earn 10% annually, that 10% is your before-tax return.

Step 4: Determine your federal tax bracket (10% to 37%)

Your federal marginal tax bracket depends on your income level and filing status. You need to enter the tax rate so the calculator can estimate the impact of taxes on your investment returns. For example, if you are a single filer with income between $50,401 and $105,700, you will fall into the 22% federal tax bracket. It is important to check the latest IRS tax brackets to ensure accuracy.

Step 5: Review your results

Once you have entered all the data, you can click on calculate. The calculator will estimate how much time it will take to reach your desired savings goal after factoring in the amount of taxes paid by you.