How Much Will My Investment Grow? Contributions, Returns and Inflation
Project how an investment grows with monthly contributions, yearly increases, inflation and tax, with a worked example and a free investment calculator.
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Free tool: Investment CalculatorHow big will your investments be in 10, 15 or 30 years? The answer depends on four things: what you start with, what you add, the return you earn and how long you leave it. This guide walks through a realistic projection, including raising your contributions over time, adjusting for inflation and allowing for tax, using the free Investment Calculator.
The building blocks
- Initial investment: the lump sum you start with.
- Monthly contributions: what you add regularly. For most people, this is the biggest driver.
- Contribution increases: raising your contributions each year, for example as your pay rises.
- Expected return: the average yearly growth you assume. Real returns vary from year to year.
- Time: the longer the period, the more compounding does the work.
- Inflation and tax: these don't change the balance on your statement, but they change what it's worth to you.
Worked example
You start with $5,000, invest $300 a month, raise your contributions by 5% each year, and earn an average 8% a year for 15 years:
| Amount | |
|---|---|
| Future value | about $155,500 |
| Total contributed | about $82,700 |
| Investment returns | about $72,800 |
| Value in today's money (3% inflation) | about $99,800 |
By the final year, your monthly contribution has grown to about $594. Without the yearly increases, keeping $300 a month throughout, you'd end with about $120,300, so the habit of raising contributions adds around $35,000.
Don't forget inflation and tax
- Inflation shrinks what the future amount can buy. At 3% a year, $155,500 in 15 years buys what about $99,800 buys today. Planning in today's money gives a more honest picture.
- Tax on returns reduces what you keep, unless you invest through tax-advantaged accounts. With a 15% tax on returns in the example, the after-tax value would be about $144,600. The 401(k) Calculator and Roth IRA Calculator cover US tax-advantaged accounts.
Choosing a return to assume
Use a cautious figure: long-term averages for diversified stock portfolios have historically been higher than for bonds or cash, but with big swings, and past returns don't guarantee future ones. Running the calculator at a few different rates, such as 5%, 7% and 9%, shows the range of outcomes and keeps you from relying on an optimistic guess.
How to use the Investment Calculator
- Open the Investment Calculator.
- Enter your initial investment and monthly contribution.
- Enter the investment period in years and the expected annual return.
- Add the inflation rate, the annual contribution increase and the tax rate on returns, if you want them included.
- Choose the compounding frequency.
- Read the results: the future value, the total contributions, the investment returns and the return on investment, plus the inflation-adjusted value and the after-tax value. The charts and the yearly table show each of these over time.
Frequently asked questions
How much will I have if I invest $300 a month?
At an 8% average return for 15 years, starting with $5,000, about $120,300; raising the $300 by 5% a year lifts it to about $155,500. Different returns give very different results, so try several rates.
Why adjust for inflation?
Because the same amount of money buys less in the future. An inflation-adjusted figure shows your future balance in today's buying power, which is easier to plan with.
Do contributions matter more than returns?
In the early years, yes: what you put in makes up most of the balance. Over decades, returns on returns take over, which is why starting early and contributing steadily matter so much.