Investment Growth Calculator
Real returns, after inflation.
Most calculators show only the nominal balance. We compute both — what your account will say (nominal) and what it will actually buy (real). Initial deposit, monthly contributions, and year-by-year projection.
| Yr | Contributed | Earnings | Balance | Real (today's $) |
|---|
Real vs. Nominal Returns
If your statement says $1 million in 30 years and inflation averages 2.5%, that million only buys what $476,743 buys today. Real return = nominal return − inflation. Always do retirement math in real dollars or you'll dramatically over-estimate purchasing power.
Compound Growth Formula
For an initial deposit P, monthly contribution C, monthly rate r, and n months:
The first term is the future value of what you started with. The second term is the future value of an annuity — your stream of monthly contributions. Add them and you get the projected balance. We then deflate by (1+inflation)^years to get the real balance.
The Two Variables That Matter Most
- Time. Doubling your time horizon roughly quadruples your final balance at typical equity returns. Starting at 25 instead of 35 is the difference between $1.4M and $590k at the same monthly rate.
- Contribution rate. Doubling your monthly from $500 to $1,000 over 30 years roughly doubles the final balance. Linear, but enormous.
What matters less than people think: picking the perfect fund. Vanguard's S&P 500 index, a target-date fund, and a three-fund portfolio all land within ~0.5% of each other over multi-decade horizons. Fees and behavior matter way more than fund selection.
Sequence-of-Returns Risk
This calculator assumes a constant return. Reality is lumpy — the order of returns dramatically affects retirement-withdrawal balances. A 2008-style crash in your first year of retirement is much worse than the same crash in year 20, even if average returns are identical. Build a 1–2 year cash cushion at retirement to avoid selling equities in a downturn.
Frequently Asked Questions
What return assumption should I use?
For a US-equity-heavy portfolio: 7% real (after inflation) is the long-run historical average. For a 60/40 stock/bond portfolio: 5% real. For 100% bonds: 2% real. Be conservative — overshooting is fine, undershooting forces hard choices late.
Should I include taxes?
Returns inside a 401(k), Roth IRA, or HSA grow tax-free; in a taxable brokerage account, dividends and realized gains are taxed yearly. For taxable accounts, subtract about 0.5–1% from the return to model the tax drag.
What about employer match?
Treat the match as part of your monthly contribution. A 5% salary contribution + 5% match on a $80k salary = $667/mo of effective contribution.