How This Calculator Projects Growth
Starting from your initial investment, the calculator adds your monthly contribution and applies your expected annual return, compounded monthly, one month at a time. Unlike a simple savings projection, it also supports an annual contribution increase — modeling the common real-world habit of raising your monthly investment each year as income grows.
Balancemonth = Balancemonth−1 × (1 + r/12) + contribution
Worked Example
$10,000 invested today, adding $300/month at a 7% expected annual return over 20 years, grows to about $196,665 — of which $82,000 is your own contributions and roughly $114,665 is investment growth.
Why the Contribution Increase Matters
Raising contributions by just 2–3% a year (roughly tracking salary growth or inflation) compounds alongside your returns. Turning on a modest annual increase in the field above — instead of keeping a flat $300/month for two decades — adds tens of thousands of dollars to the projection by year 20, without ever feeling like a large jump in any single year.
Choosing a Realistic Return
The S&P 500 has returned roughly 10% annually before inflation over the very long run (about 7% after inflation), with large year-to-year swings. Many planners model 6–8% for diversified stock portfolios and lower for bond-heavy allocations — pick a number you would be comfortable being wrong about in either direction.
This is a planning estimate. It assumes a constant return and ignores taxes, fees and market volatility along the way.