Calculator
Investment growth calculator
Compound a starting balance and monthly contributions forward — then see what that pile is actually worth once inflation has taken its cut.
At 2.5% inflation, a dollar in 25 years buys about 54 cents of what it buys today. A projection that only shows the nominal figure is not wrong — it is just answering a question nobody actually has. You do not spend dollars; you spend what dollars buy.
How this is calculated
- Contributions compound monthly at
(return − fee) / 12, deposited at the end of each month. - Nominal balance:
P(1+m)^n + C·[((1+m)^n − 1) / m], wheremis the monthly rate andnthe number of months. - Real balance divides the nominal balance by
(1 + inflation)^years. - "Lost to fees" is the difference between the balance at the gross return and the balance at the net-of-fee return.
- No taxes are modelled. In a taxable account your real result will be lower.
Reading the result honestly
Three things routinely make projections like this too optimistic, and it is worth knowing which ones apply to you before you take the number seriously.
A constant return is a fiction. Real markets deliver the average through a sequence of good and bad years, and the order matters enormously once you start withdrawing. A smooth curve is a planning tool, not a forecast.
Fees compound too. The fee field looks trivial at 0.1%, but set it to 1% and watch the bottom line. On a 25-year horizon a one-percent fee typically eats a fifth or more of the final real balance — charged whether the fund goes up or down.
Contributions rarely stay flat. If your monthly contribution does not rise with your income, it is quietly shrinking in real terms every year, exactly like the balance.
Common questions
What is the difference between nominal and real returns?
A nominal return is the headline percentage before inflation. A real return subtracts inflation, so it measures the change in what your money can actually buy. If an investment returns 7% while inflation runs at 3%, the real return is roughly 4%.
What annual return should I assume?
There is no correct answer, only a defensible one. Long-run US large-cap equity returns have historically averaged in the high single digits nominally before fees and taxes, but any particular 25-year stretch can land well above or below that. Running the calculator two or three times across a range is more informative than picking one number.
Does this calculator include taxes?
No. It models a tax-free account. In a taxable brokerage account, dividends and realised gains are taxed along the way, so your real result will be lower than shown.
How much difference does a 1% fee really make?
More than most people expect, because the fee is charged on the whole balance every year while it compounds. Set the fee field to 1% and compare it to 0.05% to see the gap on your own numbers.
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