How the projection works
Each month your balance grows by the monthly equivalent of the annual return, and your contribution is added. The annual return is treated as an effective yearly growth rate, the way fund and index returns are usually reported:
“In today’s dollars” divides the final balance by the cumulative inflation over the period, so you can compare it with prices now.
Example
$10,000 plus $300 a month for 20 years at 7% grows to about $190,958. You contribute $82,000, so investment growth makes up $108,958 — more than half the balance. With 3% inflation, that’s worth about $105,700 in today’s money.
Choosing a realistic rate of return
Past returns don’t guarantee future ones, and real returns are lumpy — a portfolio can fall 20–40% in a bad year. Using a conservative rate (5–7%) and checking the inflation-adjusted figure gives a more cautious plan.
What matters most
- Time: starting ten years earlier often matters more than doubling the contribution later.
- Costs: a 1% annual fee can consume roughly a quarter of the final balance over 30 years. Low-cost index funds help.
- Consistency: regular contributions through market dips buy more shares when prices are low.
Related Portfolio & Wealth Building Tools
Disciplined long-term investing turns regular contributions into substantial capital. Model exponential growth schedules with our Compound Interest Calculator, analyze equity returns and CAGR via the Stock Return Calculator, determine safe post-career withdrawal horizons using the Retirement Calculator, and harness dividend reinvestment with our Dividend Calculator.
Frequently asked questions
Is this the same as a compound interest calculator?
Very similar. This one treats the rate as an annual investment return and adds inflation adjustment and growing contributions; the compound interest calculator focuses on a stated interest rate and compounding frequency.
Does this include taxes?
No. In a 401(k), IRA or Roth IRA, growth is tax-deferred or tax-free. In a taxable brokerage account, dividends and realized gains are taxed, which lowers your effective return somewhat.
Should I contribute at the start or end of the month?
Start-of-month contributions get one extra month of growth each time, which adds up over decades. In practice, investing as soon as you're paid has the same effect.