What will my savings grow to?
A starting balance and a regular contribution compounded forward, separating what you put in from what the return added, year by year.
Your assumption. This site does not forecast returns.
Used to show what the final figure would buy in today's money.
After 25 years
$381,063
$160,000 of it money you put in, and $221,063 growth. That is $232,270 in today's money.
- Final balance
- $381,063
- You put in
- $160,000
- Growth
- $221,063
- Growth as a share
- 58.0%
Year by year
| Year | Contributed | Growth | Balance |
|---|---|---|---|
| 1 | $6,000 | $763 | $16,763 |
| 2 | $6,000 | $1,169 | $23,932 |
| 3 | $6,000 | $1,599 | $31,532 |
| 4 | $6,000 | $2,055 | $39,587 |
| 5 | $6,000 | $2,538 | $48,125 |
| 6 | $6,000 | $3,051 | $57,176 |
| 7 | $6,000 | $3,594 | $66,770 |
| 8 | $6,000 | $4,169 | $76,939 |
| 9 | $6,000 | $4,780 | $87,719 |
| 10 | $6,000 | $5,426 | $99,145 |
| 11 | $6,000 | $6,112 | $111,257 |
| 12 | $6,000 | $6,839 | $124,096 |
| 13 | $6,000 | $7,609 | $137,705 |
| 14 | $6,000 | $8,426 | $152,130 |
| 15 | $6,000 | $9,291 | $167,422 |
| 16 | $6,000 | $10,209 | $183,630 |
| 17 | $6,000 | $11,181 | $200,811 |
| 18 | $6,000 | $12,212 | $219,023 |
| 19 | $6,000 | $13,305 | $238,328 |
| 20 | $6,000 | $14,463 | $258,791 |
| 21 | $6,000 | $15,691 | $280,481 |
| 22 | $6,000 | $16,992 | $303,474 |
| 23 | $6,000 | $18,372 | $327,845 |
| 24 | $6,000 | $19,834 | $353,679 |
| 25 | $6,000 | $21,384 | $381,063 |
Growth compounds and contributions do not, which is why the growth column overtakes the contribution column somewhere in the middle of the table and then pulls away. Where that crossover falls is the most informative thing here, and it moves earlier with every year you start sooner.
How the arithmetic works
Each period the balance earns a return, and that return joins the balance so it earns a return of its own next time. The annual rate is converted to a periodic one geometrically, as (1 + r)^(1/p) - 1, rather than by dividing by the number of periods. Dividing would compound to more than the annual rate you entered, which flatters the projection by a margin that grows with the horizon.
What the table actually shows
Contributions and growth are kept in separate columns for a reason. Early on, almost everything in the balance is money you put in. Somewhere in the middle the growth column overtakes it and then pulls away, because contributions add and growth multiplies. Where that crossover falls is the single most informative number here, and it moves earlier with every year you start sooner.
Inflation, and why the nominal figure misleads
A million dollars in thirty years is not a million dollars. At two per cent inflation it buys what about $552,000 buys today. The figure in today's money is shown alongside the nominal one for that reason: a projection that shows only the large number invites you to plan against a figure that will not exist.
This is arithmetic, not a forecast
The return you enter is your assumption, and nobody knows what markets will do. Real returns are not smooth: a portfolio that averages six per cent gets there through years of twenty and years of minus fifteen, and the order they arrive in matters if you are drawing money out. Treat the result as what a steady rate would produce, which is a useful thing to know and not a prediction.
What this assumes
- A steady return, every period
- Real returns vary. Averaging the same rate produces a different answer from actually earning it steadily, and the difference grows with volatility.
- Contributions at the end of each period
- Contributing at the start earns one extra period of growth on every contribution, which over decades is not nothing.
- No tax and no fees
- In a TFSA or an RRSP the growth is sheltered. In a taxable account it is not, and investment fees come off the return before it compounds.