The quarterly update for 03/31/2003 is a large update, affecting many calculators, however most of the updated items are optional changes to definitions and other non-calculation items. This update addresses an important issue regarding maximum rates of return allowed to be entered in the calculators. If you are concerned about your visitors entering rates of return greater than 12%, please see the notes below regarding how you can limit these inputs.
If you have not updated your calculators in a while you should definitely refresh you existing documents with the new ones. All updates are cumulative, so if you start fresh with this update you will have all previous calculator updates as well. If you would like you can review our 12/31/2002 update: 12/31/2002 Update. (The 03/31/2003 update includes all changes included in previous updates, you do not need to download any other updates to have the most current versions of all of the calculator components.)
Update instructions:
If you have NOT made any changes to the HTML Files used in your deployment you can simply replace all HTML files with the new versions in your download. If you have made changes to your HTML files, please review the changes below.
To clear your Browser's cache:
When you test the new version of the calculators, make sure that the browser you are using uses the new files instead of any it may have in its cache. You may need to clear the browser's cache manually to ensure the new versions are loaded.
Internet Explorer:
Chose "Internet Options" under the "Tools" menu and on the "General" tab click on the "Delete Files…" button.
Netscape:
Chose "Prefrences…" under the "Edit" menu. Click on the "Advanced" category and then "Cache" option which appears under it. Click the "Clear Memory Cache" button, then click the "Clear Disk Cache" button.)
The name of the parameter is: QQ_HEADER_QQ
Any content passed to the applet in this parameter will be place on the report where the special tag QQ_HEADER_QQ is located. This can allow you to populate (using ASP, ColdFusion, JSP or another scripting language) the value of the parameter QQ_HEADER_QQ on the page that contains the applet, and the content of the parameter will appear on the generated report. You will need modify your calculator templates and the calculator applet pages to include the special QQ_HEADER_QQ tag and parameter.
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.
This update includes to important changes to the rate of return inputs and definitions of all calculators with a "rate of return" variable. All rate of return variables in all calculators now have a default maximum of 20%. This update also includes a new, expanded rate of return definitions along with the means to further limit the value that can be entered into this field. This enhancement is designed to comply with more stringent rules regarding rate of return inputs and NASD guidelines for on-line financial tools.
New definition for rate of return:
The definition for rate of return has been enhanced to better explain the risk of higher return investments. The new text on the definitions is:
The actual rate of return is largely dependant on the type of investments you select. For example, from January 1970 to February 2003 the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11%. Savings accounts at a bank pay as little as 2% 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 volitility. 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.
Maximum rate for special Rate of Return (ROR) fields: Using the applet parameter ROR_MAXIMUM will set the ROR_MAXIMUM you can limit the maximum rate of return allowed on a calculator. If this applet parameter is defined as an applet parameter for a calculator, the parameter's value will be used as the maximum instead of the default for the specific calculator.
Examples of use:
Set the maximum rate of return to 10%:
<PARAM name="ROR_MAXIMUM" value="10">
You can also simply set it to true to use the default maximum of 12%, which is the limit of reasonable interest rates defined by the NASD.
<PARAM name="ROR_MAXIMUM" value="TRUE">
We recommend setting this value to TRUE if you wish to limit the interest rates. This will allow your calculator to adjust to with future updates automatically to use a new default ROR per NASD guidelines.
The following calculators use the new ROR_MAXIMUM parameter and have the updated defintion for this item:
| Calculator Name | HTML File Changed |
|---|---|
| Mortgage Rent vs. Buy | MortgageRentvsBuy.html |
| Business Debt Consolidation | BizConsolidate.html |
| Business Buy vs. Lease | BizBuyvsLease.html |
| Buy or Lease? | BuyvsLease.html |
| Life Insurance | LifeInsurance.html |
| Savings Distribution Calculator | DistribSavings.html |
| Don't delay your savings! | WaitCost.html |
| Lunch Savings Calculator | LunchSaver.html |
| Benefit of Spending Less | SpendLess.html |
| Emergency Savings Calculator | Emergency.html |
| Compound Interest and Your Return | CompoundInterest.html |
| Cool Million | Millionaire.html |
| Savings, Taxes and Inflation | SavingsVariables.html |
| Savings Calculator | CompoundSavings.html |
| Savings Goal | Savings.html |
| College Savings Plan | CollegeSavings.html |
| Investment Loan | InvestmentLoan.html |
| Investment Returns | InvestmentReturn.html |
| Annual Stock Option Grants | StockGrants.html |
| Stock Option Calculator | StockOptions.html |
| Retirement Planner! | RetirementPlan.html |
| Retirement Pension Planner | RetirementPlan3.html |
| Retirement Income Calculator | RetirementIncome.html |
| Which is better: a Roth IRA or a Traditional IRA? | RothvsRegular.html |
| Roth IRA Calculator | RothIRA.html |
| Traditional IRA Calculator | RegularIRA.html |
| What is the advantage of converting to a Roth IRA? | RothTransfer.html |
| Variable Annuity Calculator | Annuity.html |
| How important is Social Security? | NoSocial.html |
| 401(k) Savings Calculator | Retire401k.html |
| Required Minimum Distribution (RMD) | RetireDistrib.html |
| Beneficiary Required Minimum Distribution (RMD) | RetireBeneficiary.html |
| 403(b) Savings Calculator | Retire403b.html |
| Retirement Shortfall Calculator | RetireShort.html |
| 401(k) Spend It or Save It Calculator | Rollover401k.html |
| DebtConsolidate.html | Personal Debt Consolidator |
| DebtAccel.html | Accelerated Debt Payoff |
| CADebtConsolidate.html | Canadian Personal Debt Consolidator |
| CADebtAccel.html | Canadian Accelerated Debt Payoff |
Use the following parameter to set the maximum term:
<PARAM name="MAXIMUM_TERM" value="360">
For Canadian calculators the default should be set to 300, or 25 years.
We also assume that you are paying any taxes owed with funds you that have available outside of the IRA you are converting. The IRS treats any money not directly transferred to the new Roth IRA as an early withdrawal - even if that money is used to pay the tax bill caused by the conversion. If you do not have adequate funds outside of your IRA to pay the tax liability on a conversion, you probably should not consider converting your Traditional IRA to a Roth IRA.
Compounding: Earnings on an investment's earnings, plus earned 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 earnings will generate additional earnings. 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.
Compounding: Interested earned on your CD's interest. This calculator allows you to choose the frequency that your CD's interest income is added to your account. The more frequently this occurs, the sooner your accumulated interest income will generate additional interest. You may wish to check with your financial institution to find out how often interest is being compounded on your particular CD.
It is important to remember that while 72(t) distributions are not subject to the 10% penalty for early withdrawal, all applicable taxes on the distributions must still be paid. Further, taking any early distributions from a retirement account reduces the amount of money available later during your retirement.
The report for the calculator (Retire72Tcalculation.html) has the following updated disclaimer at the end of the report:
If payments are changed for any reason other than death or disability before the required distribution period ends, the distributions may be subject to a retroactive application of the Premature Distribution penalty. It is 10% (plus interest) for all years beginning the year such payments commenced and ending the year of the modification. It is important to remember that while proper 72(t) distributions are not subject to the 10% penalty for early withdrawal, all applicable taxes on the distributions must still be paid. Further, taking any early distributions from a retirement account reduces the amount of money available later during your retirement.