An investment calculator projects how a portfolio grows from a starting balance plus recurring monthly contributions at an expected annual return. This calculator estimates portfolio growth using monthly compounding via the future-value-of-annuity formula, expressed as a final balance, total contributed, and total growth. Use it for any goal: a home down payment, a college fund, a sabbatical, or general wealth-building. The math is goal-agnostic.
Long-run benchmarks help anchor the inputs. The S&P 500 has returned an average of roughly 10.0 percent nominal and about 6.5 to 7 percent real (after inflation) from 1928 through 2024 (per the NYU Stern Damodaran historical-returns dataset, 2025). A 60/40 stock-and-bond portfolio has averaged closer to 8 percent nominal. Use a real return for goals priced in today's dollars; use a nominal return only when the target dollar amount already accounts for inflation.
This model assumes a taxable account, with no tax shelter. In practice, dividends and realized capital gains are taxed each year, and a final sale triggers federal long-term capital-gains tax of 0, 15, or 20 percent depending on income. Subtract roughly 1 to 2 percent from the headline return when comparing this output against a Roth IRA or 401(k) projection that grows untaxed; that haircut is the tax drag this calculator does not model.
Key takeaway
The single biggest lever in any investment projection is time, not return rate. Doubling your contribution doubles the contributed total but has a smaller effect on the final balance than starting five years earlier at the same rate. Compounding is non-linear, the last decade of a 30-year horizon contributes more growth than the first two decades combined. Whatever your goal, the cheapest way to a bigger number is to start sooner with whatever you have.
How it's calculated
The projection uses the future-value-of-annuity formula with monthly compounding:
FV = P × (1 + i)^n + C × ((1 + i)^n − 1) / i
Where:
- P is the initial investment (lump sum at month 0)
- C is the monthly contribution
- i is the monthly rate (annual return ÷ 12, expressed as a decimal)
- n is the total number of months (years × 12)
The first term grows the lump sum across the full horizon; the second sums the future value of each monthly contribution. Contributions are treated as ordinary annuity (end of month), making them at the start of each month would yield a slightly higher number. The compounding frequency matters: monthly compounding produces a marginally higher final balance than annual compounding at the same nominal rate, because earnings start earning earnings sooner.
Source: Future-value-of-annuity with monthly compounding, FV = P(1+i)^n + C × ((1+i)^n − 1) / i
Examples
$10K starting, $500/mo for 20 years at 7%
- Initial investment $10,000
- Monthly contribution $500
- Years invested 20
- Expected annual return 7%
Starting with $10,000, contributing $500/month for 20 years at a 7% annual return grows to roughly $300,851 at year 20. Of that, $130,000 is the original $10K plus 240 monthly $500 contributions; the rest, about $170,851, is compound growth. Notice that growth is larger than contributions, this is compounding doing its job, but only because the 20-year horizon gives it time to.
House down payment goal: $0 starting, $1,500/mo for 5 years at 5%
- Initial investment $0
- Monthly contribution $1,500
- Years invested 5
- Expected annual return 5%
Saving aggressively for a 5-year goal at a conservative 5% return (appropriate for short-horizon money, bonds, T-bills, or balanced funds rather than 100% equities) reaches roughly $102,009. Almost all of that, $90,000, is contributions; only ~$12,000 is growth, because the horizon is short. Short-goal money should prioritize return of capital over return on capital, a market drawdown 6 months before you need the funds is the dominant risk.
Frequently asked questions
What's a realistic taxable-return assumption for this calculator?
For long horizons, 5–7% real (after-inflation) is a reasonable baseline for a diversified equity-heavy portfolio. Nominal returns on US stocks have averaged ~10% over a century, but inflation has run ~2.5–3% over the same period, so the purchasing-power return is closer to 7%. Subtract another 1–2% for tax drag in a taxable account (dividends taxed annually, capital gains on rebalancing or sale), and a realistic after-tax real return for projection purposes is more like 4.5–5.5%. Use the higher number only if you're modeling pre-tax nominal dollars and willing to discount later.
How do capital gains taxes affect this projection?
This calculator outputs a pre-tax balance. In a taxable brokerage account, you owe federal long-term capital gains tax (0%, 15%, or 20% depending on income) on appreciation when you sell, plus state tax in most states. Annual dividends are taxed at qualified-dividend or ordinary-income rates depending on the holding. For a 20-year horizon ending in a $300K final balance with $130K contributed, the $170K of growth would owe roughly $25K federal long-term capital gains at the 15% rate, meaningful but not catastrophic. A Roth IRA or 401(k), by contrast, avoids that drag entirely.
How is this different from a retirement or Roth IRA calculator?
Three differences. First, no contribution cap, a taxable brokerage account has no annual limit, while IRAs and 401(k)s do. Second, no withdrawal restrictions, money is accessible anytime without age 59½ rules or 10% penalties, which matters for non-retirement goals like a house, college, or sabbatical. Third, no tax shelter, every dividend, interest payment, and realized gain is taxed in the year it occurs, dragging on compounding. Use this calculator for general wealth-building or specific non-retirement goals; use a Roth IRA or 401(k) calculator when the money is earmarked for age 60+.
Should I include inflation in the return rate I enter?
Decide whether you want a nominal projection (raw dollars at the future date) or a real projection (today's purchasing power). If you enter a nominal rate (10% for stocks), the final number is future dollars, large but partially eroded by 20–30 years of inflation. If you enter a real rate (7% for stocks, ~4–5% for balanced), the final number is in today's dollars, directly comparable to current prices. For goal-based saving (house, college), real returns make planning easier because you can compare to today's cost of the goal. Pick one convention and stick with it.
Why does the result change if I move money to a Roth IRA or 401(k)?
Tax-advantaged accounts kill the annual tax drag, dividends and rebalancing gains compound untouched. Over 20–30 years that differential is large: a typical taxable account loses roughly 15–25% of its potential growth to ongoing taxes plus the final capital-gains hit, while a Roth IRA keeps 100%. The trade-off is contribution caps ($7,000/yr for IRAs in 2026, higher for 401(k)s) and withdrawal restrictions. Standard advice: fill tax-advantaged space first, then use a taxable account for anything beyond the cap or for non-retirement goals.