One equation, five questions
Every savings plan comes down to five numbers: what you start with, what you add each month, the return you earn, how long you keep going and the goal you end with. Know any four and the fifth is fixed. Most calculators only answer one of these questions, usually the end balance, so this one lets you pick the number you want to find with the tabs above and fill in the rest.
Goal = start × (1 + i)^n + deposit × ((1 + i)^n − 1) ÷ i, where i is the monthly return and n the number of months
The end amount, monthly deposit and starting amount can be worked out directly from that equation. The return and the time cannot be rearranged neatly, so the calculator finds them by trying values until the balance lands exactly on your goal, which is the same method a spreadsheet uses for its RATE and NPER functions.
Which question to ask
If you already know how much you can save, the end amount and time tabs show where that habit leads. If you have a fixed goal and deadline, such as a house deposit in five years or a retirement target at 60, the monthly deposit tab tells you what to set up as an automatic transfer. The starting amount tab is useful when you expect a lump sum, such as a bonus or inheritance, and want to know how much of it to invest to stay on track.
The return needed tab is the reality check. If your plan only works at 12% a year, it depends on results that even the stock market has rarely delivered over long periods, and it is safer to plan on a lower figure and adjust the deposit or the timeline. A diversified stock portfolio has averaged roughly 10% a year before inflation over the last century, and around 7% after it, but with large swings from year to year.
Assumptions behind the answers
Deposits are added at the end of each month and the yearly return is converted to a monthly rate, so the balance grows smoothly. Real investments rise and fall, which means the same average return can produce a higher or lower end balance depending on when the good and bad years arrive. Taxes and fees also reduce what you keep, so a common shortcut is to enter a return that is already net of fees.
Common questions
What return do I need to turn $500 a month into $1 million?
Over 30 years, about 9.4% a year. Over 40 years, about 6%.
How much do I need to invest a month to reach $500,000 in 20 years?
With $10,000 to start and a 7% yearly return, about $880 a month.
Is this calculator adjusted for inflation?
Not unless you want it to be. Enter a return after inflation, such as 7% instead of 10% for stocks, and the results are in today's dollars.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.