Investment Calculator

What this projects

Enter a starting amount, a monthly contribution, an expected annual return and a number of years. The calculator compounds monthly and charts the result against the total you contributed.

The gap between the two lines is growth. Watching how that gap behaves over time is the point of the tool, and it is more instructive than the final number.

The shape to notice

For the first several years the balance is mostly money you put in. Growth is doing very little, and progress feels slow enough that many people conclude the whole exercise is pointless and stop.

By the final third of a long projection, growth is producing more each year than the contributions do. The account can gain more in a single late year than was contributed in the entire first decade.

Nothing changes in the mechanism to cause this. Compounding simply needs a base to work on, and building that base is what the early years are for. The practical implication is about persistence rather than optimisation: the years that feel least rewarding are the ones doing the most work.

Try running the same monthly contribution over 10, 20 and 30 years and compare the growth portion of each. The relationship is not linear, and it is the strongest argument for starting with a small amount now rather than a larger amount later.

Choosing a return figure

This is where projections turn into fiction, and it deserves care.

• Use a long-run average rather than recent performance. The last few years, good or bad, are not a forecast
• Use a figure after fees. A 7% gross return with a 1% all-in charge is 6%, and that difference compounds. Our investment fee calculator shows how much
• Consider whether the figure should be after inflation. A projection in today's money is more meaningful for retirement planning than a larger nominal figure that buys less
• Be more conservative over shorter horizons. Averages need decades to assert themselves

If you would not defend the number to a sceptical friend, lower it. A projection built on an optimistic return is not a plan, it is a hope with a chart attached.

What the smooth line hides

The chart shows steady growth. Real markets do not deliver that. They deliver sequences: sharply positive years, sharply negative ones, and long flat stretches, which average out over time.

Two consequences worth internalising:

Over long horizons, the averaging works well enough that a projection like this is a reasonable guide to the shape of the outcome, though never to the exact figure.

Over short horizons, or when drawing money out, the order of returns matters as much as the average. A poor sequence early in retirement does lasting damage that the same returns in a different order would not. This is why money you will need within a few years does not belong in the market at all, and why an emergency fund sits outside your investments. Building an emergency fund covers sizing it.

So use this to compare decisions, not to forecast a balance. Contributing 400 rather than 300, or starting now rather than in three years, are comparisons the tool answers well. What you will actually have in 2056 is not.

Contributions versus returns

Change the monthly contribution and watch the outcome. Then change the return by the same proportion and compare.

Over long periods, the return has more leverage, because it sits in the exponent. Over shorter periods, the contribution matters more, because there is not enough time for compounding to assert itself.

The uncomfortable implication is that the variable with the most leverage is the one you control least. You cannot choose your returns. You can choose your contribution, your costs, and your time horizon, and those are where effort actually pays.

Tax wrappers come first

The calculator models growth, not tax, and in practice the tax treatment usually matters more than a fractional difference in return.

In the US, that means using 401(k) and IRA space, and the choice between traditional and Roth treatment. In the UK, it means ISAs and pensions. In both cases the tax-advantaged allowance is annual and generally does not carry forward indefinitely, so space skipped this year is often gone.

The sensible order is to use the available tax-advantaged space first, then minimise costs within it, then worry about the projection. Roth vs traditional explained covers the US decision; retirement contribution limits covers how the caps are structured.

Before you increase contributions

Two things generally beat additional investing, whatever this projection shows:

• An employer match, which is an immediate return on the matched portion that no market return reliably equals
• High-interest debt, where paying it down is a guaranteed return equal to the rate. Our debt or invest calculator compares the two directly with your figures

Both of these are certain. A projected return is not, and the difference between a guaranteed 20% and a hoped-for 7% is not close.

The most useful way to use this

Rather than asking what you will have, use it to price decisions:

1. What does waiting cost? Run the same contribution starting now and starting in five years
2. What is an extra 100 a month worth? Run it twice and compare the growth, not just the total
3. What does a fee cost? Run it at your gross return, then at gross minus your all-in fee
4. How sensitive is this to the return? Run it at 5%, 7% and 9% and see how wide the range is

That last one is worth doing before trusting any single projection. The spread will be uncomfortable, and that discomfort is accurate information about how much certainty a projection can offer.

Inflation, and projecting in today's money

A projection showing a large number decades away is easy to misread, because those units will not buy what they buy now.

There are two honest ways to handle this. You can project in nominal terms, using your full expected return, and remember that the final figure is in future money. Or you can project in real terms by reducing your expected return by your inflation assumption, in which case the result is in today's money and directly comparable to what you spend now.

The second is usually more useful for retirement planning, because the question you actually want answered is what standard of living the balance supports, not how large the number is.

As a rough illustration: a 7% nominal return with 3% inflation is about 4% real. Running the same contribution at 4% rather than 7% produces a much smaller and much more meaningful figure.

Withdrawals are a different question

This tool projects accumulation only. It assumes contributions go in and nothing comes out.

Drawing an income from a portfolio is a genuinely harder problem, because the order of returns matters as well as the average. A sharp fall early in retirement, while you are also selling units to live on, does damage that the same fall later would not, since you are selling more units at depressed prices and they are not there to recover.

That is why general guidance about sustainable withdrawal rates is much more cautious than average historical returns would suggest, and why the transition from saving to drawing is the point at which professional advice most often earns its cost.

Use this tool to answer how much you might accumulate. Treat how much you can safely draw as a separate question requiring separate work.

Privacy

Every figure stays in your browser. There is no account, nothing is transmitted, and nothing is stored on a server. The Copy link button encodes your inputs into the page address so you can bookmark or share a scenario, which is the only way any of these numbers leave your device, and only if you choose it.