How the projection works
Enter a starting amount, how much you add each month, the yearly return you expect and how many years you plan to keep going. Each month the balance earns one twelfth of the yearly return, then your contribution is added. That is compound growth: returns start earning returns of their own.
You can raise your contribution by a percentage each year, for example in line with pay rises, and adjust for inflation to see what the final balance would buy in today's money.
Why starting early matters so much
Money added in the first years has the longest time to compound, so it ends up contributing the most growth. The "start later" option shows what the same plan is worth if you begin a few years from now but stop on the same date. The gap is usually much larger than the contributions you skipped.
Choosing a realistic return
Savings accounts pay a fairly steady, lower rate. Broad stock index funds have historically returned more over long periods, but with large ups and downs along the way and no guarantee. A lower assumption gives a more cautious plan.
- The projection uses one steady rate. Real investments rise and fall year to year.
- Fees and taxes are not included and reduce real returns.
- Use the inflation setting to see the result in today's money.
Frequently asked questions
How much will I have if I save a fixed amount every month?
It depends on the monthly amount, the return and the number of years. Enter them above to see the final balance, how much of it came from your contributions, and how much came from growth.
What is compound interest?
Compound interest means the interest or returns you earn are added to your balance, so they earn returns too. Over long periods this makes growth accelerate, which is why time matters as much as the amount you save.
How much does it cost to start investing later?
Use the "start later" setting to compare the same plan started now and started a few years later, ending on the same date. The difference is the growth the early years would have produced.
Does this account for inflation?
Yes, if you enter an inflation rate. The "in today's money" figure shows what the final balance would be worth in today's prices.