Unlike a savings account, an investment's return isn't fixed — this calculator asks for a single flat annual rate and assumes it holds steady every year, which real markets never actually do. It's still a useful planning tool, but the number you type into that field is doing more work than any other input, which is worth understanding before trusting the result.
Using the calculator's own contribution numbers — $10,000 to start, $500/month, for 20 years — here's the same plan at three different assumed returns:
| Assumed return | Final balance | Growth from returns |
|---|---|---|
| 5% | $232,643.24 | $102,643.24 |
| 7% (default) | $300,850.72 | $170,850.72 |
| 9% | $394,034.95 | $264,034.95 |
Two extra percentage points of assumed return — 5% to 7% — adds over $68,000 to the projected balance; going from 7% to 9% adds nearly $93,000 more. Since nobody can guarantee a specific return in advance, it's worth running your own numbers at a conservative rate as well as an optimistic one, rather than anchoring on a single figure.
This projection doesn't subtract any account or fund fees — it's a gross number. To see why that matters, compare a 7% gross return to a 6% return (the same 7%, minus a 1% annual fee, which is a realistic cost for some actively managed funds) on the same $10,000 + $500/month plan over 20 years: the 1-point fee drag costs $36,728.23 by the end, even though 1% a year sounds small. Fees compound the same way returns do — they just work against you instead of for you — which is why even a seemingly minor expense ratio is worth comparing across fund options before committing to one for the long term.
There's no universal answer — long-term stock market averages are often cited around 7–10% before inflation, but your actual return depends on what you invest in. Try a few scenarios.
No — this is a gross growth projection. Account or fund fees, and any taxes on gains, would reduce your actual take-home amount.
Because of compounding — money invested earlier has more time to grow on top of its own growth, so even small early contributions can outgrow larger later ones.