What regular saving turns into.

How savings actually grow

Compound growth is not a straight line. For the first few years almost nothing appears to happen, and then the curve bends. Seeing where the bend falls for your own numbers is the most useful thing this calculator does.

1. Enter what you have now. The starting balance. Zero is a perfectly good answer if you are starting from nothing.
2. Enter a monthly contribution. The amount you add each month. This is usually the biggest lever available to you — larger than the return rate for most people, because it is the one you control.
3. Enter an expected annual return. A broad stock index has historically returned around 7% a year after inflation over long periods, though individual decades vary enormously. A savings account might pay 4% nominal. Use a number you can defend, not the best year you remember.
4. Set the number of years and read the split. The result separates what you contributed from what the growth added. That split is the honest measure of compounding — early on it is almost all contributions, and that is normal.

When this comes up

• Deciding whether to increase a monthly contribution. Adding $100 a month for thirty years at 7% produces roughly $120,000 extra, of which only $36,000 is your money. The rest is the compounding on it.
• Comparing a savings account with an investment. A 4% account and a 7% portfolio look close in a single year and very different over twenty-five. The tool makes the difference visible instead of theoretical.
• Showing a child what a pension is. The curve does the explaining better than any sentence, particularly the part where starting ten years earlier beats contributing twice as much.
• Sanity-checking a projection someone gave you. If a fund illustration claims a final balance, reconstructing it here tells you what return and contribution assumptions it must have used.

Questions