How to use it
- Enter what you have invested today and what you plan to add each month.
- Choose an average yearly return and how many years you will keep investing.
- Press Calculate.
You'll see your ending balance, how much of it comes from your own contributions and how much from growth, and a year-by-year breakdown.
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About this calculator
How it Works
This investment calculator provides a rough estimate of how your investments could grow over time, assuming a steady average rate of return and a regular monthly contribution. Growth is compounded monthly, so the returns you earn each month begin earning returns of their own.
A summary shows your ending balance and how much of it comes from your contributions versus growth, along with a pie chart of that split. A bar chart shows how the balance builds year by year, and the table below it lists the values behind the chart.
Limitations
This calculation is intended for long-term investing and assumes a steady average return with regular contributions. In reality, returns vary a great deal from year to year, and some years are negative. Your actual growth depends on the state of the market, the investments you choose, and your overall strategy. Fees, taxes, and inflation are not included, so keep in mind that a future balance will buy less than the same amount does today. Table values are calculated at the beginning of each month.
How can this tool help me?
This tool helps you understand:
- how much you need to save from your income, and how long it will take to reach your financial goals through investing.
- what realistic expectations look like, so you can prepare for your future with a plan instead of a guess.
- the power of compound growth, and how much regular contributions add to your wealth over time.
How can I figure out my retirement needs?
First, estimate the amount of money you'll need to retire. The 4% rule is a common starting point: multiply the yearly income you would like in retirement by 25 to find the account balance needed to support it. For example, $40,000 a year would call for about $1,000,000.
Next, estimate the number of years until you retire. Then adjust the starting amount and monthly contribution in the calculator until the ending balance reaches your target. Remember that other sources of retirement income, such as Social Security or a pension, reduce how much you need to draw from your own savings.
What can I expect to learn?
Your annual rate of return is what primarily determines how fast you will reach your goal. That rate depends on your investment strategy and risk tolerance; investments with greater growth potential generally come with larger ups and downs. Over long periods, a broadly diversified portfolio of U.S. stocks has historically averaged roughly 10% a year before inflation, or about 7% after inflation. Past returns don't guarantee future results, so it is worth trying a few different rates.
You will find that consistency is key in reaching your goals. You don't need a large amount of money to start investing. Setting aside a portion of your income regularly lets compound growth do much of the work, and even relatively small monthly contributions add up to a meaningful amount when they are made consistently over many years.