The rate of return assumptions used in the program and the rate of return generated by the calculator should not be considered as suggesting or guaranteeing any rate of return or level of performance on any product, service or strategy offered by Homestead Advisers or Homestead Financial Services Corp., including any Homestead Fund.
Important
The Emergency Fund Block is designed to guide you towards saving for an adequate amount of money in case of unexpected expenses or time out of work.
The program will try to estimate your essential monthly living expenses by taking your total income and subtracting federal and state taxes, FICA and Medicare taxes, and an assumed savings rate to get to your total annual living expense. The program then assumes only 60% of the total annual living expenses are essential, and then divides by 12 to convert to monthly expenses.
The program begins by determining how many months of expenses you want your emergency fund to cover. Keep in mind that having some capacity to handle an unexpected financial shock is critical to your financial wellness.
For a large goal like an Emergency Fund, the program will recommend setting savings milestones. Your savings approach will determine the contribution amount needed to reach each milestone. The program will provide estimated amounts based on your selected coverage goal; however, you can edit these amounts to fine tune your plan and save at a pace that is right for you.
The program assumes you have already made the current month’s savings on the goal. Therefore, the first savings amount calculated will start the following month. Your goal amount and savings will increase at the base inflation rate utilized by your financial firm. Because of this, the software inflates your total savings by this rate after each year. The program defaults the account growth of your Emergency Fund to 1%.
The results displayed in the Emergency Fund Block are dependent on the information you have entered and are estimates of when you may achieve your goal. The results displayed may vary with each use and over time.
You should consult with your financial professional if you have questions about your ability to achieve your Emergency Fund. This program does not provide legal, tax, accounting, or financial advice. Before making decisions with legal, tax, accounting, or financial ramifications, you should consult appropriate professionals for advice that is specific to your situation.
IMPORTANT: The projections or other information generated by iBlocks regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.