📊 Investment Calculator
Project the long-term growth of your investments, capital gains, and compound interest returns.
Projecting a portfolio, and reading the projection honestly
A projection is a what-if, not a forecast. It answers one question precisely: if a given amount grows at a given rate for a given time, what does it become? Markets do not supply a given rate, so the output is a central case to plan around rather than a number to count on.
Used that way it is genuinely useful. It tells you whether a savings plan is roughly adequate or obviously short, and it shows the thing most people underestimate, which is how much of a long-run balance is growth rather than deposits.
Where the final number comes from
On $20,000 invested with $400 added monthly at 8.5% for 15 years, the end balance is about $202,400. You contributed $92,000 of that, so $110,400 is growth. The split moves sharply with time:
| Years | Contributed | Growth | Balance | Growth share |
|---|---|---|---|---|
| 5 | $44,000 | $12,700 | $56,700 | 22% |
| 10 | $68,000 | $44,600 | $112,600 | 40% |
| 15 | $92,000 | $110,400 | $202,400 | 55% |
| 20 | $116,000 | $226,000 | $342,000 | 66% |
| 25 | $140,000 | $421,000 | $561,000 | 75% |
By year twenty-five, three quarters of the account was never deposited by you. That is the whole argument for a long horizon, and the reason that interrupting a plan for five years costs far more than five years' worth of contributions.
What rate to assume
Long-run averages for broad equity indices have historically fallen in the 7% to 10% nominal range before inflation, with decade-long stretches well outside it. A balanced portfolio with bonds will sit lower. Assuming 6% to 7% nominal is a reasonable planning compromise; it leaves room to be pleasantly surprised rather than structurally short.
Subtract fees from whatever rate you assume. A fund charging 0.9% a year instead of 0.1% costs about 20% of the final balance over thirty years. It is the only variable in the whole projection that you fully control.
Sequence risk, and why the average is not the experience
An average return of 8% does not mean 8% every year, and the order of returns matters once you are withdrawing. A portfolio that falls 30% in the first two years of retirement and then recovers ends up far smaller than one with the same average that falls at the end, because the early withdrawals came out of a depleted balance.
While you are still contributing, the effect runs the other way: a crash early in your saving life is an opportunity, because every contribution afterwards buys more. The projection above assumes smooth growth and therefore shows neither effect.
Dollar-cost averaging
Investing a fixed amount on a fixed schedule means you buy more units when prices are low and fewer when they are high, which lowers your average cost and removes the timing decision. It does not guarantee a better result than investing a lump sum: historically, lump sums have won about two thirds of the time simply because markets rise more often than they fall. What averaging reliably improves is behaviour, by making the decision automatic.
Nominal versus real
That $202,400 after 15 years is in future dollars. At 3% inflation it buys what about $130,000 buys today. For any horizon beyond a decade, run the projection a second time at your real rate, which is roughly (1 + nominal) / (1 + inflation) − 1, to see what the balance actually means.
A worked example
A 32-year-old has $18,000 invested and can add $550 a month. At 7% nominal, by 65 the balance is about $1,025,000. At 7% nominal with 2.5% inflation, the real value is roughly $455,000 in today's money. Both numbers are true; only the second one tells you what retirement looks like.
Frequently Asked Questions (FAQs)
How much should I invest each month?
A common target is 15% of gross income towards long-term goals, including any employer match. If that is out of reach, start with whatever is sustainable and raise it with each pay rise. The habit matters more than the opening amount, because the early years are the ones with the longest runway.
Is this calculator suitable for retirement planning?
It projects the accumulation phase well. It does not model withdrawals, taxes, pensions or social security, all of which matter once you stop contributing. Use the retirement calculator for the drawdown side.
Why does my actual account not match the projection?
Because the projection assumes a constant rate and reality delivers a sequence. Over a year or two the gap can be large in either direction. Over twenty years the projection tends to be in the right neighbourhood, provided the rate assumption was sensible.
Should I include my home as an investment?
Generally not in a portfolio projection. A home you live in produces no income, carries costs, and cannot be partially sold to fund expenses. It is worth tracking as net worth, but it does not behave like the liquid assets this calculator models.
What does the 4% rule have to do with this?
It is the other end of the same problem. The 4% guideline suggests that withdrawing 4% of a portfolio in the first year of retirement, then adjusting for inflation, has historically lasted thirty years. Working backwards, it means you need roughly 25 times your annual spending, which turns a retirement income target into a portfolio target you can plug in here.
How do taxes affect the result?
Significantly in a taxable account, where dividends and realised gains are taxed as they occur, and not at all inside a tax-sheltered retirement account until withdrawal. A rough adjustment for a taxable account is to reduce the assumed return by 0.5 to 1.5 percentage points depending on turnover and your bracket.
Is a higher assumed return just optimism?
It compounds optimism. Over thirty years, assuming 10% instead of 7% roughly doubles the projected balance, which can make an inadequate plan look adequate. If the plan only works at a high assumed return, it does not work.