Investment Growth Calculator
Most investment calculators give you a large nominal number and stop. This one also shows what that number is worth in today’s money, because thirty years of inflation changes the answer far more than most people expect.
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Read the real figure, not the big one
A projection of a million dollars in thirty years sounds like security. At two and a half percent inflation it buys roughly what four hundred and eighty thousand buys today. Neither number is wrong, but only one of them tells you how you will actually live.
Whenever you see a long-range projection anywhere — from a calculator, an adviser or a pension statement — the first question worth asking is whether it is nominal or real.
The return assumption is doing most of the work
Change the return by two percentage points and watch the result move. That sensitivity is the honest reason to distrust precise-looking projections: the output is far more certain than the input deserves.
A diversified stock portfolio has historically returned somewhere in the region of seven percent a year after inflation over very long periods, but with enormous variation between decades, and past performance is a guide to the range of outcomes rather than to any particular one.
Sequence matters, not just the average
This calculator assumes a smooth annual return. Reality delivers the same average through a jagged path, and when the bad years arrive matters. Poor returns early while the balance is small barely dent the outcome; the same returns just before you start withdrawing can be serious. That risk is not visible in any single-number projection.
Contributions are what you control
You cannot choose the return. You can choose the contribution and the number of years. Try raising the monthly figure by a hundred and compare that against a one-point improvement in return — over a long horizon they are often comparable, and one of them is actually within your control.
Frequently asked questions
What return should I assume?
Many people model six to eight percent nominal for a diversified stock portfolio over long horizons. Lower it for a bond-heavy allocation, and keep in mind that the realised figure over any particular twenty-year stretch has varied widely.
Does this include fees?
No. Subtract your expected fund costs from the return before entering it. A one percent annual fee compounds against you exactly as returns compound for you, and over decades it removes a substantial share of the final balance.
Does it include tax?
No. Returns in a tax-advantaged account compound untaxed; in a taxable account, dividends and realised gains are taxed along the way, which lowers the effective return.
Is investing monthly better than a lump sum?
Historically, investing a lump sum immediately has more often beaten spreading it out, simply because markets rise more often than they fall. Spreading it reduces the risk of very bad timing, which is a legitimate reason to prefer it.