Investment Calculator
Project what an investment could grow to, then see the same figure in today’s money. The gap between those two numbers is what inflation quietly takes.
Your portfolio
Set a return you can defend, net of fund fees.
Contributions
Assumptions
Subtract fund fees first — a 0.5% expense ratio is 0.5% less return.
The long-run US average is around 2.5%–3%.
Real return after inflation: 4.39%
Nominal versus inflation-adjusted growth
The dashed line is what the balance will actually buy, in today's money.
Why the two figures differ
At 2.50% inflation, prices roughly 1.85× over 25 years. That is why $548,171 then has the purchasing power of $295,678 today. Both numbers are correct — only the second tells you what the money will buy.Year-by-year projection
| Year | Paid in | Nominal | Today's money |
|---|---|---|---|
| 1 | $31,000 | $33,004 | $32,199 |
| 2 | $37,000 | $41,586 | $39,582 |
| 3 | $43,000 | $50,788 | $47,162 |
| 4 | $49,000 | $60,656 | $54,951 |
| 5 | $55,000 | $71,237 | $62,963 |
| 6 | $61,000 | $82,583 | $71,211 |
| 7 | $67,000 | $94,749 | $79,709 |
| 8 | $73,000 | $107,795 | $88,472 |
| 9 | $79,000 | $121,784 | $97,516 |
| 10 | $85,000 | $136,784 | $106,855 |
| 11 | $91,000 | $152,868 | $116,508 |
| 12 | $97,000 | $170,116 | $126,490 |
| 13 | $103,000 | $188,609 | $136,821 |
| 14 | $109,000 | $208,440 | $147,519 |
| 15 | $115,000 | $229,705 | $158,603 |
| 16 | $121,000 | $252,506 | $170,095 |
| 17 | $127,000 | $276,957 | $182,014 |
| 18 | $133,000 | $303,174 | $194,385 |
| 19 | $139,000 | $331,287 | $207,229 |
| 20 | $145,000 | $361,432 | $220,571 |
| 21 | $151,000 | $393,756 | $234,437 |
| 22 | $157,000 | $428,417 | $248,852 |
| 23 | $163,000 | $465,584 | $263,845 |
| 24 | $169,000 | $505,437 | $279,444 |
| 25 | $175,000 | $548,171 | $295,678 |
What this assumes
- A constant nominal return compounded monthly, with contributions at each month end.
- Inflation applied at a constant rate to convert future dollars into today’s.
- No taxes, fund fees or trading costs are deducted — model your return net of fees.
- Markets deliver a sequence of returns, not an average one. Treat this as an illustration, not a forecast.
Future value in 25 years
$548,171
Worth $295,678 in today's money after 2.50% inflation.
- Total contributions
- $175,000
- Investment gains
- $373,171
- Value in today's money
- $295,678
- Lost to inflation
- $252,493
- Real annual return7.00% nominal
- 4.39%
Nominal returns versus real returns
A nominal return is the headline number. A real return is what is left once inflation has taken its share, and it is the only one that tells you whether your purchasing power actually grew.
The exact relationship is real = (1 + nominal) ÷ (1 + inflation) − 1. At a 7% return and 2.5% inflation the real return is 4.39%, not the 4.5% that simple subtraction suggests. Over long horizons that small difference compounds into a meaningful one.
This matters most for the headline figure. A portfolio projected to reach $1.5 million in thirty years at 2.5% inflation has the purchasing power of about $715,000 today. Both numbers are correct; only one of them tells you what the money will buy.
Choosing a return assumption
The return you assume is by far the most influential input, and it is also the one you know least about. A few reference points, all before fees and taxes:
- US large-cap stocks
- Have averaged roughly 10% a year nominally over the long run, with individual years ranging from −37% to +38%.
- A 60/40 stock and bond portfolio
- Historically nearer 7%–8% nominal, with materially smaller drawdowns.
- Investment-grade bonds
- Typically 4%–5% nominal over long periods.
- Cash and savings accounts
- Roughly track inflation over time, which means a real return close to zero.
Why fees deserve their own line in your thinking
A 1% annual fee does not cost you 1% of your outcome. It compounds against you exactly as returns compound for you.
$500 a month for thirty years at 7% grows to about $566,000. At 6% — the same portfolio with a one percent fee — it reaches roughly $475,000. The fee consumed around $91,000, or 16% of the final balance, for one percentage point a year. Model your expected return net of fees rather than gross.
What a projection cannot tell you
Markets do not deliver an average return each year; they deliver a sequence. Two portfolios with identical average returns can end up in very different places if one suffered its worst years early while money was being withdrawn.
Treat a projection as an illustration of how contributions, time and rate interact — not as a forecast. Its most useful output is comparative: what changes if I save $200 more a month, or start three years earlier, or accept one percent less in fees.
Frequently asked questions
US large-cap stocks have averaged around 10% a year nominally over the long term, a 60/40 stock and bond mix nearer 7%–8%, and investment-grade bonds 4%–5%. Many planners use 6%–7% nominal for a diversified portfolio to stay conservative. Whatever you choose, subtract your fund fees first — a 0.5% expense ratio is a 0.5% lower return, every year.
Nominal returns are the raw percentage gain. Inflation-adjusted, or real, returns show what that gain is worth in purchasing power. The exact formula is (1 + nominal) ÷ (1 + inflation) − 1, so a 7% return with 2.5% inflation is a 4.39% real return. Long-range projections should always be read in real terms if you want to know what the money will actually buy.
A common starting point is 15% of gross income towards long-term investing, including any employer match. The more useful question is what your goal requires: work backwards from the amount you need and the time you have, and this calculator will show whether the contribution you have in mind gets there.
This calculator models level monthly contributions, which is dollar-cost averaging by definition. Historical studies generally find that investing a lump sum immediately beats spreading it out about two-thirds of the time, simply because markets rise more often than they fall. Averaging in still has a strong behavioral case: it reduces the risk of a badly timed single entry and makes it easier to keep going.
No. Results are pre-tax. In a taxable account, dividends and realized gains are taxed along the way, which reduces the amount left compounding. In a 401(k) or traditional IRA, growth is tax-deferred until withdrawal; in a Roth account, qualified withdrawals are tax-free. Account type can change the final figure substantially over long periods.