Investment Calculator

A projection that reports only a big future balance is telling you a fraction of the story. This one carries three drags through the same timeline — the return you assume, the annual fee your fund or adviser takes, and the inflation that erodes what the ending number buys — and reports both a nominal balance and its value in today’s dollars. The return you enter is treated as an EFFECTIVE annual figure, a scenario rather than a quoted APR, so the monthly multiplier is its twelfth root rather than the rate divided by twelve. The annual fee is handled the same way, as a retention factor: each month the balance is multiplied by (1 + return)^(1/12) and by (1 − fee)^(1/12), and then the contribution lands at the end of the month. Contributions are end-of-month throughout, which means this month’s deposit earns nothing this month. Inflation is applied only at the end of each year, dividing the balance by (1 + inflation)^year — the constant-dollar conversion the Bureau of Labor Statistics describes for expressing a future amount in current purchasing power. Accepted ranges are a starting amount up to $1,000,000,000, monthly contributions up to $10,000,000, a return from −50% to 50%, fees from 0% to 10%, inflation from 0% to 20%, and 1 to 100 years. Defaults are 7% return, 0% fees and 3% inflation. Fees are where the arithmetic gets counterintuitive, and the SEC has published the benchmark. Its investor bulletin on fees takes $100,000 invested for twenty years at 4% annual growth with no further contributions: at a 0.25% annual fee roughly $208,000 remains, and at 1% roughly $179,000. That is about $29,000 of difference — from three quarters of a percentage point a year. This calculator reproduces $208,413.03 and $179,213.48 on the same inputs, which is why the model is built this way rather than by subtracting the fee from the return. The reason the damage is so large is that fee drag is not the fee. It is the fee plus every dollar of return that fee-money would itself have earned for the rest of the term, so it compounds against you on exactly the same curve your balance compounds on. Measured against a no-fee path on those SEC inputs, the 0.25% fee costs $10,699.28 and the 1% fee costs $39,898.83 — the ending gap grows faster than the fee ratio does. The results panel shows that no-fee twin explicitly so you can see the difference rather than infer it. Inflation does something different and equally worth seeing. It does not change how many dollars you end up with; it changes what those dollars are. At 3% a year, a dollar thirty years out buys about 41 cents of what a dollar buys today, so a projection that looks like a comfortable seven-figure balance may be a much more modest sum in real terms. Comparing nominal and today’s-dollar columns in the same table is the single most useful thing on the page. One caveat the maths cannot fix: a fixed annual return is a smooth line, and real markets are not. This tells you what a steady assumption implies, not what will happen. For a purely deterministic savings view without fees or inflation, the compound interest calculator is simpler; for retirement-specific contribution limits and employer matching, see the 401k calculator.