 Annual rate of return
 This is the annual rate of return you expect from your investments after taxes. The actual rate of return is largely dependent on the type of investments you select. For example, from December 1999 to December 2009, the average annual compounded rate of return for the S&P 500 was 0.6%, including reinvestment of dividends. From January 1970 to December 2009, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest 12month return was 61% (June 1982 through June 1983). The lowest 12month return was 43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% 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 longterm 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 funds and/or investment companies may charge.
 Existing balance
 Any existing balance for the accounts.
 Compensate for taxdeduction
 If you check this box the calculator will assume contributions to the taxdeferred investment are taxdeductible when they are made. The calculator will then increase the contribution amount for the taxdeferred investment by the amount required to make the net contribution equal to the investments that have contributions made on an after tax basis.
 Years to contribute
 Number of years you plan on making contributions.
 New contributions
 Your periodic contribution. All contributions are assumed to happen at the beginning of the period.
 Contribution frequency
 The frequency of your contributions. The options are Monthly, Quarterly, or Annually. All contributions are assumed to be made at the beginning of the period.
 Years of withdraws
 Number of years you plan on taking distributions. Enter "1" for a lump sum distribution. All distributions are assumed to happen at the beginning of the period.
 Withdrawal frequency
 The frequency of your distributions. The options are Monthly, Quarterly or Annually. All distributions are assumed to be taken at the beginning of the period.
 Tax during contributions / withdrawals*
 Your estimated marginal tax rate. You can use the table below to assist you in determining your current tax rate.
10% 
$0  16,750 
$0  8,375 
$0  $11,950 
$0  8,375 
15% 
$16,751 68,000 
$8,376 34,000 
$11,951 45,550 
$8,376 34,000 
25% 
$68,001 137,300 
$34,001 82,400 
$45,551 117,650 
$34,001 68,650 
28% 
$137,301 209,250 
$82,401 171,850 
$117,651 190,550 
$68,651 104,625 
33% 
$209,251 373,650 
$171,851 373,650 
$190,551 373,650 
$104,626 186,825 
35% 
over $373,650 
over $373,650 
over $373,650 
over $186,825 
Source: http://www.irs.gov/pub/irsdrop/rp0950.pdf
*Lower maximum tax rates on capital gains and dividends would make the investment return for the taxable investment more favorable, thereby reducing the difference in performance between the hypothetical investments shown. Investors should consider their personal investment horizon and income tax bracket, both current and anticipated, when making an investment decision, as these may further impact the comparison.
