What return rate should I use for investments?

Historical stock market average is 10% nominal, 7% after inflation. For conservative estimates, use 6-7%. Bonds return 4-5%. A balanced 60/40 portfolio averages 7-8%.

How much should I contribute to my 401k?

At minimum, contribute enough to get full employer match (typically 3-6% of salary) - this is free money with 100% instant return. Ideal target is 15-20% of gross income for retirement.

Roth IRA or Traditional IRA?

Roth: Pay taxes now, tax-free withdrawals later (better if you expect higher tax bracket in retirement). Traditional: Tax deduction now, pay taxes later (better if you expect lower tax bracket in retirement). Many people do both.

When can I realistically retire?

Rule of thumb: You can retire when your portfolio is 25x your annual expenses (4% withdrawal rate). If you need $40k/year, you need $1M saved. Calculator helps you see how long it takes to reach your goal.

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Investment Calculator

Calculate compound interest growth and visualize your investment over time

Inputs

Starting Principalⓘ

Monthly Contributionⓘ

Regular monthly deposits increase growth significantly

Annual Interest Rateⓘ

Conservative: 5-7%, Moderate: 8-10%, Aggressive: 10-12%

Time Horizonⓘ

Longer time horizons benefit more from compound growth

Compound Frequency

How often interest is calculated and added

Enter values to see results

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What is this?

An investment calculator shows how compound interest grows your money over time. Compound interest means you earn interest on your interest - the "8th wonder of the world" according to Einstein. Regular contributions dramatically accelerate growth.

How to use

Enter your starting amount, monthly contribution, expected return rate, and time horizon. The S&P 500 has averaged ~10% annually over 100 years, but 7-8% is more conservative for planning. Longer time horizons and consistent contributions are key to wealth building.

Tips

Start early - 10 years of investing beats 30 years of saving in a bank account
Consistency > timing - monthly contributions smooth out market volatility
Tax-advantaged accounts (401k, IRA) compound faster due to deferred taxes
Real returns = nominal returns - inflation (typically 2-3%)
Don't try to time the market - "time IN the market beats timing THE market"
Increase contributions with raises - 1% salary increase = massive long-term impact
Rebalance annually to maintain target asset allocation
Dollar-cost averaging reduces emotional investing mistakes

Disclaimer: This calculator provides estimates for informational purposes only and does not constitute financial advice. Actual results may vary based on lender terms, market conditions, and individual circumstances. Consult a qualified financial advisor before making financial decisions. See our full disclaimer for details.