The quarterly update for 12/31/2019 is a large update, affecting every calculator. The majority of the changes affect the functionality of the calculations, updating them to 2020 rules and regulations. The most significant calculation changes in this update were to the retirement, savings, and tax calculators. Additional changes have also been made changes for continued ADA support. All standard calculators meet accessibility specification WCAG 2.1 Level AA and Section 508.
"Setting Every Community Up for Retirement Security Act", better known as the SECURE Act was signed into U.S. law on December 20th, 2019 (technically it was an amendment to a much larger funding bill). The SECURE Act has a significant impact on retirement distributions. All affected calculators have been updated, both in definitions and functionality, to incorporate the new law as it now is understood. It is expected that the IRS will release further procedures to implement the SECURE Act. We expect at least one more update in 2020 to accomodate IRS published revenue procedures.
As of this update, Internet Explorer 8 (IE8) is no longer supported. Although official support of IE8 ended on 12/31/2018 we continued to package specific IE8 required files and code in our download package. Starting with this update conditional code and files specific to IE8 are no longer provided. Microsoft ended all support for IE8 on 1/12/2016. Internet Explorer 9 support will continue through 12/31/2020.
All maintenance releases are cumulative, so if you apply this update, you will have all previous calculator updates as well. For your reference you can view the previous update notes here: 9/30/2019 Update.
For more detailed information please see our frequently asked questions: FAQ: V3 Frequently Asked Questions
For more detailed information please see our deployment documentation: V3 Deployment Information
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.
Please note, if you have a Servlet or other custom deployment, installation instructions for your package will found on your download page or provided separately.
The V3 (HTML5/JavaScript) calculators do not require any edits or modifications to HTML pages, all changes are encapsulated within the JS files provided.
All calculators follow the ADA guidelines to meet accessibility specification WCAG 2.1 Level AA and Section 508. We continue to refine our ADA support with this update. Over the past year all calculators have been tested and updated to include ADA support, this includes:
SortSite:
https://www.powermapper.com/products/sortsite/checks/browser-compatibility/
WebAim:
https://wave.webaim.org/
We will continue to monitor and update our software to maintain compliance and ensure any future compliance issues are resolved quickly. If you have a specific calculator on your site where you have a question please feel free to contact us.
Improvements to the graphical user interface continue with this update. This includes refined keyboard only use of the calculator help icons.
The Act changed the age that RMDs must begin and for most account owners. For account owners born after 6/30/1949 RMDs are required now to start at age 72. Account owners born on 6/30/1949 or earlier continue to use 70 1/2 as their start age. This also means that if RMDs have already started for an account, you must continue the distributions even if you are not 72.
Generally, for account owners and their spouses, the SECURE Act did not change how the RMD is calculated; it only changed the age that they start.
Allowing the beneficiary of a retirement account to stretch out distributions over their life time has been significantly impacted by the SECURE Act of 2019. Previously, all beneficiaries had this option. With the new law only designated eligible beneficiaries are allowed this type of minimum distribution. If you are not a designated eligible beneficiary, you have until 12/31 of the year that contains the 10th anniversary of the original account owner's death to withdraw all funds from the account. There are no minimum withdrawals during this 10 year period, but all funds must be withdrawn before the deadline to avoid significant penalties. Designated eligible beneficiaries are a surviving spouse, a child of the account owner (but generally only until they are 18, at that point the 10 year rule begins) or a chronically ill individual. For more information please see Modification of Required Distribution Rules for Designated Beneficiaries.
| RMD & Stretch IRA Calculator | Use this calculator to help determine how you can stretch out your retirement plan distributions for as long as possible. |
|---|---|
| Required Minimum Distribution (RMD) | Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account. This financial calculator will also look at potential future year's distribution requirements. |
| Required Minimum Distribution (RMD) - Current Year | Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account for the current year. |
| Required Minimum Distribution (RMD) - Future Projection | Use this calculator to create a projection of your future Required Minimum Distributions (RMD) as an owner of a qualified retirement account. |
| Required Minimum Distribution (RMD) - with Stretch Projection | Use this calculator to create a stretch projection for Required Minimum Distributions (RMD) of a qualified retirement account. |
| Beneficiary Required Minimum Distributions (RMD) | Use this calculator to determine your Required Minimum Distributions (RMD) as a beneficiary of a retirement account. |
| Beneficiary Required Minimum Distributions (RMD) - Spouse Inherited IRA | Use this calculator to create a future projection and Required Minimum Distributions (RMD) as a spouse beneficiary electing not to treat the inherited retirement account as his/her own. |
| 457 Plan Roth Conversion with Distributions Calculator | Use this calculator to help determine if converting your 457 plan account to a 457 Roth plan account is a good move for you. |
| Roth 401(k) Conversion Calculator | This calculator will show the advantage, if any, of converting your pre-tax 401(k) to a Roth 401(k). |
| Roth IRA Conversion with Distributions Calculator | Use this calculator to help determine how you can stretch out your retirement plan distributions for as long as possible. |
IMPORTANT! The calculators have been updated for the SECURE Act of 2019. However, while the new law is effective as of January 1st, 2020 the IRS has not released procedures for its implementation. Future IRS published procedures may have an impact on enforcement and interpretation of the Act.
New definition:
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2019, had an annual compounded rate of return of 13.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2019, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.7% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally 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. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
New definition Spanish Definition:
Es la tasa compuesta anual de rendimiento que usted prevé lograr con sus ahorros o inversiones. La tasa de rendimiento real depende en gran parte de los tipos de inversiones que usted escoja. En los 10 años que terminaron el 31 de diciembre de 2019, el Índice Standard & Poor's 500® (S&P 500®) tuvo una tasa compuesta anual de rendimiento de 13.2%, incluyendo la reinversión de los dividendos. Del 1o de enero de 1970 al 31 de diciembre de 2018, el promedio de la tasa compuesta anual de rendimiento de S&P 500®, incluyendo la reinversión de los dividendos, fue aproximadamente 10.7% (fuente: www.standardandpoors.com). Desde 1970, el mayor rendimiento en un período de 12 meses fue 61% (junio de 1982 a junio de 1983). El menor rendimiento en un período de 12 meses fue -43% (marzo de 2008 a marzo de 2009). Las cuentas de ahorro en una institución financiera pueden pagar tan poco como el 0.25%, o incluso menos, pero tienen un riesgo mucho menor de pérdida del capital.
Es importante recordar que éstos son casos hipotéticos y que las tasas futuras de rendimiento no se pueden predecir con certeza, y que las inversiones que pagan mayores tasas de rendimiento generalmente están sujetas a mayor riesgo y volatilidad. La tasa real de rendimiento en las inversiones puede variar mucho a lo largo del tiempo, especialmente en inversiones a largo plazo. Esto incluye la potencial pérdida del capital de su inversión. No es posible invertir directamente en un índice, y la tasa compuesta de rendimiento que se menciona arriba no refleja cargos de ventas y otros gastos y honorarios que pueden cobrar los fondos de inversión y/o empresas de inversión.
This affects the following 66 calculators:
The actual rate of return is largely dependent on the type of investments you select. For example, the annual return of the S&P/TSX Composite Index for the 10 year period from December 31, 2009 through December 31, 2019 was 3.9% (source spindices.com). Over the same period the total annual return (including dividends) was 6.9% (source spindices.com). Savings accounts at a bank or credit union may 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 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.
This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2019 the CPI has a long-term average of 2.9% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2019, the last full year available, the CPI was 1.8% annually as reported by the Minneapolis Federal Reserve.
For Spanish the definition now reads as:
Es la tasa de inflación que usted prevé como promedio a largo plazo. Una medida común de inflación en Estados Unidos es el Índice de precios al consumidor (CPI por sus siglas en inglés). De 1925 a 2019 el CPI tiene un promedio a largo plazo del 2.9% anual. En los últimos 40 años el CPI más alto fue 13.5% en 1980. En el 2019, el último año completo disponible, el CPI fue 1.8% anual, según informa el Banco de la Reserva Federal - Minneapolis.
This affects the following 25 calculators:
Have been finalized for 2020. The limits and amounts were increased slightly from 2019 for all HSA calculations. All calculators were updated to indicate the new 2020 amounts. Income tax brackets and rates were updated to 2020. This includes the following:
The table below shows the limits for HSA's in 2020.
| 2020 | 2019 | Change | |
|---|---|---|---|
| HSA Contribution Limit | Single: $3,550 Family: $7,100 | Single: $3,500 Family: $7,000 | Single: $50+ Family: $100+ |
| HSA catch-up contributions* | $1,000 | $1,000 | No change, not indexed to inflation |
| HDHP minimum deductible | Single: $1,400 Family: $2,800 | Single: $1,350 Family: $2,700 | Single: $50+ Family: $100+ |
| HDHP maximum out-of-pocket** | Single: $6,900 Family: $13,800 | Single: $6,750 Family: $13,500 | Single: $150+ Family: $300+ |
*Catch-up contributions can be made anytime during the year in which the participant turns 55. **This includes deductible amount, co-payments and other non-premium payments. | |||
Please note, you are no longer eligible to make HSA contributions starting in the first month that you are eligible for and enrolled in Medicare Part A or B.
For complete details on HSAs you may wish to visit the U.S. Treasury at US Treasury Health Savings Accounts
This affects the following calculators:
| HTML File Changed | Name |
|---|---|
| HSABusiness.html | Health Savings Accounts (HSA) Employer Benefit |
| HSAContribution.html | Health Savings Account (HSA) Contribution Calculator |
| HSASavings.html | Health Savings Account (HSA) Savings Calculator |
| HSAvsTraditional.html | Health Savings Account (HSA) vs. Traditional Health Plan |
| HSAGoal.html | Health Savings Account (HSA) Goal Calculator |
The Qualified business income deduction (QBID) reduces your taxable income by 20% of your qualified business income, subject to certain limitations. Calculating your QBID is not included in this calculator but you can estimate the amount with the following Total the QBI for all of your pass-through entities. This will be reported on your Schedule K-1 or Schedule C for a sole proprietorship.
| Single and Heads of Household | Married Filing Jointly | |
|---|---|---|
| AGI at or below | $160,700 20% of business income from qualified trades or businesses including Specified Service Trade or Business (SSTB)es | $321,400 20% of business income from qualified trade or business including specified services or businesses. |
| AGI in range has prorated deduction | $160,700-$210,700 Phase-out of QBID deduction for Specified Service Trade or Business (SSTB). Phase-in of employee wage requirements for all other businesses. | $321,400-$421,400 Phase-out of QBID deduction for Specified Service Trade or Business (SSTB). Phase-in of employee wage requirements for all other businesses. |
| AGI above | $210,700 No QBID deduction for Specified Service Trade or Business (SSTB). QBID limited to 50% of employee wages paid or 25% of employee wages paid plus 2.5% of invested capital. | $421,400 No QBID deduction for Specified Service Trade or Business (SSTB). QBID limited to 50% of employee wages paid or 25% of employee wages paid plus 2.5% of invested capital. |
Which entities are considered Specified Service Trade or Business (SSTB) is not clearly defined. The following are specifically identified as NOT a SSTB: real estate brokers, property managers, architecture, engineering and bankers. For all other businesses you are considered a SSTB if you are in the trade or business of performing services as an employee - or - if the business is a Specified Service Trade or Business (SSTB) as defined by Section 1202(e)(3)(A).
Section 1202(e)(3)(A) includes any trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees.
Definition for long term care costs has been updated to:
The default daily value was increased to $280.
The Payroll withholding information has been updated to 2020 rules and rates. Starting in 2020, empoyees have a new W-4 form. Completion of this form is optional. Integration of the new W-4 will be included in the 3/31/2020 update.
This affects the following calculators:
| HTML File Changed | Name |
|---|---|
| Payroll.html | Payroll Deductions Calculator |
| PayrollHourly.html | Payroll Hourly Paycheck Calculator |
| Payroll125.html | Payroll Flexible Spending Account (FSA) Calculator |
| PayrollGross.html | Payroll Net to Gross Calculator |
| 457Payroll.html | Payroll Deduction Calculator with 457 Contributions |
| IncomeOneorTwo.html | Should my spouse work? |
| RetirePayrollSavings.html | Retirement Contribution Effects on Your Paycheck Calculator |
| RetirePayrollSavings401k.html | 401(k) Contribution Effects on Your Paycheck Calculator |
| RetirePayrollSavings457.html | 457 Contribution Effects on Your Paycheck Calculator |
| Compare401k2.html | Roth vs. Traditional 401(k) and Your Paycheck Calculator |
| SPPayroll.html | Cheque deducciones y retenciones |
| SPRetirePayrollSavings.html | Efectos de sus Aportaciones a su Jubilación sobre su Cheque de Paga |
Definition updates as follows:
Your current year gross earnings that were subject to FICA taxes (Social Security tax and Medicare tax). This total should not include the current payroll period or any income from other sources or employers. We use this amount to determine if you are required to have Social Security tax or additional Medicare tax withheld for the current payroll period. Typically, this is your gross earnings minus employer paid health insurance and any Flexible Spending Account (FSA) contributions. In 2020, year-to-date earnings is not required or used for incomes under $137,700 per year, or if your current year-to-date earnings plus your current payroll does not exceed $137,700.
For 2020, Social Security tax is calculated as your gross earnings times 6.2%. For 2020, incomes over $137,700 that have already had the maximum Social Security tax of $8537.40 withheld will not have additional withholding. Please note that if you have other wages or employers this calculator does not make any assumptions as to the total Social Security tax withheld for the current year other than the actual inputs for this calculator. This tax is also referred to as the Federal Insurance Contributions Act Old Age Survivors and Disability Insurance (FICA OASDI).
Medicare tax is calculated as your gross earnings times 1.45%. Unlike the Social Security tax, there is no annual limit to the Medicare tax. Starting in 2013, an additional Medicare tax of 0.9% is withheld on all gross earnings paid in excess of $200,000 in a calendar year. If you enter an amount for the year-to-date gross earnings, this additional Medicare tax will be calculated based on the current period's gross earnings that exceed the annual $200,000 threshold. If no year-to-date amount is entered, any additional Medicare tax withholding will be calculated only for any gross earnings in excess of $200,000 for the current payroll period. If year-to-date wages prior to the current payroll period have exceeded $200,000, the year-to-date wages must be entered to calculate an accurate additional Medicare tax.
Federal income tax withholding is calculated by:
| Annual taxable income between these amounts | Annual withholding | Withhold additional % of income over this amount |
|---|---|---|
| *Source: https://www.irs.gov Publication 15 Income Tax Withholding Tables for 2020 | ||
| $0 - $3,800 | $0.00 | |
| $3,800 - $13,675 | $0.00 | plus 10% of income over $3,800 |
| $13,675 - $43,925 | $987.50 | plus 12% of income over $13,675 |
| $43,925 - $89,325 | $4,617.50 | plus 22% of income over $43,925 |
| $89,325 - $167,100 | $14,605.50 | plus 24% of income over $89,325 |
| $167,100 - $211,150 | $33,271.50 | plus 32% of income over $167,100 |
| $211,150 - $522,200 | $47,367.50 | plus 35% of income over $211,150 |
| $522,200 - (no limit) | $156,235.00 | plus 37% of income over $522,200 |
| Annual taxable income between these amounts | Annual withholding | Withhold additional % of income over this amount |
|---|---|---|
| *Source: https://www.irs.gov Publication 15 Income Tax Withholding Tables for 2020 | ||
| $0 - $11,900 | $0.00 | |
| $11,900 - $31,650 | $0.00 | plus 10% of income over $11,900 |
| $31,650 - $92,150 | $1,975.00 | plus 12% of income over $31,650 |
| $92,150 - $182,950 | $9,235.00 | plus 22% of income over $92,150 |
| $182,950 - $338,500 | $29,211.00 | plus 24% of income over $182,950 |
| $338,500 - $426,600 | $66,543.00 | plus 32% of income over $338,500 |
| $426,600 - $633,950 | $94,735.00 | plus 35% of income over $426,600 |
| $633,950 - (no limit) | $167,307.50 | plus 37% of income over $633,950 |
| College Type | Tuition & Fees | Room & Board | Total | Change from 2018-19 |
|---|---|---|---|---|
| Public 4-Year (in-state tuition) | $10,440 | $11,510 | $21,950 | 2.7% |
| Public 4-Year (out-state tuition) | $26,820 | $11,510 | $38,330 | 2.4% |
| Private 4-Year | $36,880 | $12,990 | $49,870 | 2.8% |
The tables and text below has been updated:
| Tax Filing Status | Income Phase-Out Range |
|---|---|
| Married filing jointly | $104,000 - $124,000 |
| Single, Head of Household or Married Filing Separately (and have not lived with spouse for last year)* | $65,000 - $75,000 |
| Married filing separately* | $0 - $10,000 |
| Married filing jointly (spouse has employer plan, IRA owner does not)** | $196,000 - $206,000 |
Roth IRA contributions are limited for higher incomes. If your income falls in a 'phase-out' range you are allowed only a prorated Roth IRA contribution. If your income exceeds the phase-out range, you do not qualify for any Roth IRA contribution. The table below summarizes the income 'phase-out' ranges for Roth IRAs.
| Tax Filing Status | Income Phase-Out Range |
|---|---|
| Married filing jointly or head of household | $196,000 to $206,000 |
| Single | $124,000 - $139,000 |
| Married filing separately | $0 - $10,000 |
The total of your traditional IRA contributions that were made without a tax deduction. Traditional IRA contributions are often tax-deductible. However, if you have an employer-sponsored retirement plan at work, such as a 401(k), your tax deduction is limited based on your income. This calculator automatically determines if your tax deduction is limited by your income.
| Tax Filing Status | Income Phase-Out Range |
|---|---|
| Married filing jointly | $105,000 - $125,000 |
| Single, Head of Household or Married Filing Separately (and have not lived with spouse for last year)* | $66,000 - $76,000 |
| Married filing separately* | $0 - $10,000 |
| Married filing jointly (spouse has employer plan, IRA owner does not)** | $198,000 - $208,000 |
| Tax Rate | Married Filing Jointly or Qualified Widow(er) | Single | Head of Household | Married Filing Separately |
|---|---|---|---|---|
| *Caution: Do not use these tax rate schedules to figure 2019 taxes. Use only to figure 2020 estimates. Source: Rev. Proc. 2019-44 | ||||
| 10% | $0 - $19,750 | $0 - $9,875 | $0 - $14,100 | $0 - $9,875 |
| 12% | $19,750 - $80,250 | $9,875 - $40,125 | $14,100 - $53,700 | $9,875 - $40,125 |
| 22% | $80,250 - $171,050 | $40,125 - $85,525 | $53,700 - $85,500 | $40,125 - $85,525 |
| 24% | $171,050 - $326,600 | $85,525 - $163,300 | $85,500 - $163,300 | $85,525 - $163,300 |
| 32% | $326,600 - $414,700 | $163,300 - $207,350 | $163,300 - $207,350 | $163,300 - $207,350 |
| 35% | $414,700 - $622,050 | $207,350 - $518,400 | $207,350 - $518,400 | $207,350 - $311,025 |
| 37% | Over $622,050 | Over $518,400 | Over $518,400 | Over $311,025 |
NOTE: The actual tax calculators will be updated at the end of the tax season, in the 3/31/2020 update.
Calculations and definitions updated for 2020. The calculations use the 2020 FICA income limit of $137,700 with an annual maximum Social Security benefit of $36,132 ($3,011 per month) for a single person and 1.5 times this amount for a married couple. Please see https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf for more information.
These changes affect the following calculators:
| Name | HTML File Changed |
|---|---|
| Social Security Benefit Calculator | SocialSecurity.html |
| How important is Social Security? | NoSocial.html |
| Retirement Planner Calculator | RetirementPlan.html |
| Retirement Pension Planner Calculator | RetirementPlan3.html |
| Retirement Nestegg Calculator | RetirementNestegg.html |
| Retirement Income Calculator | RetirementNumber.html |
| Retirement Planner with Retirement Earnings Calculator | RetirementPlan4.html |
The definitions of Social Security in each of these calculators has been updated to the following: Social Security is based on a sliding scale depending on your income, how long you work and at what age you retire. Social Security benefits automatically increase each year based on increases in the Consumer Price Index. Including a spouse increases your Social Security benefits by 1.5 times your individual estimated benefit. Please note that this calculator assumes that only one of the spouses work. Benefits could be different if your spouse worked and earned a benefit higher than one half of your benefit. If you are a married couple, and both spouses work, you may need to run the calculation twice – once for each spouse and their respective income. This calculator provides only an estimate of your benefits.
The calculations use the 2020 FICA income limit of $137,700 with an annual maximum Social Security benefit of $36,132 ($3,011 per month) for a single person and 1.5 times this amount for a married couple. To receive the maximum benefit would require earning the maximum FICA salary for nearly your entire career. You would also need to begin receiving benefits at your full retirement age of 66 or 67 (depending on your birthdate). This calculator rounds your age of full Social Security benefits to the next highest full year. If your birthdate is between 1955 and 1959 your actual full retirement age for Social Security is 66 plus two months for each year after 1954. Your actual benefit may be lower or higher depending on your work history and the complete compensation rules used by Social Security.
For Spanish versions:
El Seguro Social está basado en una escala móvil en base a sus ingresos, a cuánto tiempo trabaja y a qué edad se jubila. Los beneficios del Seguro Social aumentan automáticamente todos los años en base a los aumentos del Índice de Precios al Consumidor. El incluir a un cónyuge aumenta sus beneficios del Seguro Social en 1.5 veces el cálculo de su beneficio individual. Note que esta calculadora asume que sólo uno de los cónyuges trabaja. Los beneficios podrían ser diferentes si su cónyuge ha trabajado y ganado un beneficio que es más de la mitad de su beneficio. En el caso de un matrimonio en el que ambos cónyuges trabajan, podría tener que hacer el cálculo dos veces - una por cada cónyuge con su respectivo ingreso. Esta calculadora sólo provee un cálculo aproximado de sus beneficios.
En las calculaciones se utiliza el límite de ingreso 2020 FICA (Ley de la Contribución Federal al Seguro Social) de $137,700 con un beneficio anual máximo del Seguro Social de $36,132 ($3,011 por mes) para una persona soltera, y esa cantidad multiplicada por 1.5 para un matrimonio. Para recibir el beneficio máximo, usted tendría que haber ganado el salario máximo FICA por casi toda su carrera. También tendría que comenzar a recibir beneficios a su plena edad de jubilación de 66 ó 67 años (dependiendo de su fecha de nacimiento). Esta calculadora redondea su plena edad de jubilación para recibir beneficios del Seguro Social al siguiente año completo. Si su fecha de nacimiento es entre 1955 y 1959, el Seguro Social considera que su plena edad de jubilación es 66 más dos meses por cada año después de 1954. Su beneficio real podría ser menor o mayor, dependiendo de su historial de trabajo y las reglas completas de compensación que usa el Seguro Social.
These changes affect the following calculators:
| Category | Name | HTML File Changed |
|---|---|---|
| Investment | Inflationary Millionaires | InflationMillionaire.html |
| Inflation and Consumer Prices Calculator | InflationPrice.html | |
| Inflation - Historic Impact on Investments | InflationHistory.html |
This is a flexible savings account that allows Canadians 18 and older to save for any purpose and withdrawals are tax free. The contribution limit for 2020 is $6,000, not including any catchup contributions for previous withdrawals or years where you didn't contribute the maximum. In recognition of the fact that people are likely to have multiple savings objectives at various stages of their lives - e.g. vacation, wedding, car, home or cottage - the full amount of withdrawals may be re-contributed to a TFSA starting the following year, to ensure that there is no loss in a person's total savings. For complete details of how a TFSA works please visit https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html.
| Income Range | Annual Grant Calculated As |
|---|---|
| $0 - $47,630* | $0.40 for each $1 for the first $500. $0.20 for each $1 for the next $1,500. Maximum annual grant is $600. |
| $47,630* - $95,259* | $0.30 for each $1 for the first $500. $0.20 for each $1 until you reach the maximum grant. Maximum annual grant is $550. |
| over $95,259* | $0.20 for each $1 for the first $2,500. Maximum annual grant is $500. |
In addition, definitions for Education Cost Inflation and Rate of return have been adjusted to be more Canadian specific.
This is the annually compounded rate of return you expect from your investments. This will also be the rate used if you end up with a negative balance and need to borrow money to meet your goal. The actual rate of return is largely dependent on the type of investments you select. For example, the annual return of the S&P/TSX Composite Index for the 10 year period from December 31, 2009 through December 31, 2019 was 3.9% (source spindices.com). Over the same period the total annual return (including dividends) was 6.9% (source spindices.com). Savings accounts at a bank or credit union may 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 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.
This is the percentage that you expect educational costs to increase per year. The annual education inflation is approximately 3.3% (source: Statistics Canada 2018 - 2019 Academic year).