Investment Calculator 2026
See how much your investment will grow with compound interest and monthly contributions. Compare conservative, average, and aggressive return scenarios with optional inflation and capital gains tax adjustments.
Enter your initial investment and monthly contributions, set an expected annual return (or pick a preset), choose your investment horizon, and optionally apply inflation and capital gains tax. The calculator shows future value, total contributions vs. interest earned, a growth chart, and a year-by-year breakdown.
| Year | Balance | Contributions | Interest |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 1 | $17,055 | $16,000 | $1,055 |
| 2 | $24,695 | $22,000 | $2,695 |
| 3 | $32,970 | $28,000 | $4,970 |
| 4 | $41,932 | $34,000 | $7,932 |
| 5 | $51,637 | $40,000 | $11,637 |
| 6 | $62,148 | $46,000 | $16,148 |
| 7 | $73,531 | $52,000 | $21,531 |
| 8 | $85,859 | $58,000 | $27,859 |
| 9 | $99,210 | $64,000 | $35,210 |
| 10 | $113,669 | $70,000 | $43,669 |
| 11 | $129,329 | $76,000 | $53,329 |
| 12 | $146,288 | $82,000 | $64,288 |
| 13 | $164,655 | $88,000 | $76,655 |
| 14 | $184,546 | $94,000 | $90,546 |
| 15 | $206,088 | $100,000 | $106,088 |
| 16 | $229,419 | $106,000 | $123,419 |
| 17 | $254,685 | $112,000 | $142,685 |
| 18 | $282,049 | $118,000 | $164,049 |
| 19 | $311,684 | $124,000 | $187,684 |
| 20 | $343,778 | $130,000 | $213,778 |
How compound interest works
Compound interest is interest earned on your principal plus on interest you've already earned. The formula is A = P(1 + r/n)^(nt) — A = future value, P = principal, r = annual rate, n = compounding frequency per year, t = years. With monthly contributions, each contribution grows from the time it's invested until the end.
Historical stock market returns (S&P 500)
The S&P 500 has averaged about 10% per year nominal return over long periods (1926–present). After inflation (roughly 3% historically), that's about 7% real return. The “Average market (8%)” preset in this calculator is a conservative but realistic assumption for diversified long-term stock investing. Short-term returns vary widely year to year — these figures are only meaningful over 10+ year time horizons.
How much should you invest per month?
A common guideline is to invest 10–20% of gross income. 10% is a minimum many advisors suggest; 15% is a solid target for retirement; 20% or more accelerates wealth building. Use our paycheck calculator to see your take-home pay, then decide what you can comfortably invest each month.
| Scenario | ~Result at 8% |
|---|---|
| $500/mo · 10 yrs · 8% | ~$91,000 |
| $500/mo · 20 yrs · 8% | ~$294,000 |
| $500/mo · 30 yrs · 8% | ~$745,000 |
| $1,000/mo · 20 yrs · 8% | ~$589,000 |
| $10K lump · 20 yrs · 8% | ~$49,000 |
| $10K lump · 30 yrs · 8% | ~$109,000 |
Investment strategies by age
Time is your biggest advantage. Use 10–12% aggressive preset. Consistent monthly investing lets compounding work its full magic over 40+ years.
Balance growth with stability. 8% is a reasonable default. Max your employer 401(k) match, then IRA, then taxable account.
Increase contributions if you started late. Continue 6–8% assumptions. Start considering how to reduce sequence-of-returns risk.
Consider a slightly lower expected return (5–7%) and use the inflation toggle to plan in today's dollars. Transition more to bonds as retirement nears.
Impact of inflation on investments
Inflation reduces the real value of future dollars. An 8% nominal return with 3% inflation is roughly a 5% real return. The calculator's inflation rate option converts your ending balance into today's purchasing power so you can see inflation-adjusted growth. For long-term goals (e.g. retirement in 20–30 years), always consider inflation when judging whether your target is enough.
Investment taxes explained
In taxable accounts, investment gains can be taxed as capital gains — long-term rates are 0%, 15%, or 20% depending on income. The calculator's optional capital gains tax rate applies a flat rate to your total gain (ending balance minus total contributions) to show after-tax value. For IRA/401(k), tax is deferred until withdrawal. Use our capital gains tax calculator for more detail.
Lump sum vs monthly investing
Lump sum investing (e.g. $10,000 today) can capture full market growth if the market rises. Monthly investing (dollar-cost averaging) spreads risk and often yields similar long-term results while fitting paycheck flow. Use the calculator: set initial to $10,000 and monthly to $0 for lump sum; set initial to $0 and monthly to $500 to see regular contribution growth. Many people do both.
2026 long-term capital gains tax rates and the 0% zone — what every investor needs to know
The long-term capital gains (LTCG) rate you pay depends on your taxable income, not your gross income. The 2026 thresholds (IRS Rev. Proc. 2025-32) create meaningful planning opportunities:
| LTCG rate | Single filers | Married filing jointly |
|---|---|---|
| 0% | ≤ $49,450 | ≤ $98,900 |
| 15% | $49,451 – $545,500 | $98,901 – $613,700 |
| 20% | > $545,500 | > $613,700 |
| +3.8% NIIT | MAGI > $200,000 | MAGI > $250,000 |
Strategic tax-gain harvesting in the 0% zone
The 2026 standard deduction is $16,100 for single filers, so a single person with no other income can realize up to $65,550 in gross income ($49,450 + $16,100) — including long-term capital gains — and pay 0% federal capital gains tax. This is why many early retirees intentionally realize gains each year to reset their cost basis tax-free, a strategy called tax-gain harvesting.
Short-term vs. long-term: the 1-year cliff
Assets held 12 months or less are short-term and taxed as ordinary income (10%–37%). Holding an investment just one day past 12 months converts a potential 37% tax to a maximum 20% (or 0% if you're in a low bracket). Qualified dividends also receive the same 0%/15%/20% LTCG rates. Non-qualified dividends are taxed as ordinary income.
Tax-location strategy: which investments belong in taxable, tax-deferred, and Roth accounts
Asset allocation answers what you own. Tax-location answers where you hold it. Optimal tax-location can add 0.5–1%+ per year in after-tax returns without changing a single investment.
| Account type | Best-fit investments | Reasoning |
|---|---|---|
| Taxable brokerage | Tax-managed equity index funds, international stocks | Low-turnover index funds generate few taxable events. International stocks qualify for the Foreign Tax Credit — only claimable in taxable accounts. |
| Traditional 401(k) / IRA (tax-deferred) | Bonds, REITs, high-dividend stocks, actively managed funds | Bond interest and REIT dividends are taxed as ordinary income. Deferring removes annual tax drag; you pay later at (potentially) lower retirement rates. |
| Roth IRA / Roth 401(k) | High-growth stocks, small-cap stocks, aggressive funds | Highest expected growth goes here — gains are never taxed. No RMDs means assets compound indefinitely. |
Note: these are general guidelines, not personalized advice. Your situation — income level, marginal tax rate, years to retirement, and estate goals — should shape your final decision. A fee-only financial advisor can model the specific impact for your portfolio.
Sequence of returns risk: why two investors with the same average return can get very different outcomes
This calculator assumes a constant annual return — which is mathematically useful for planning but doesn't reflect reality. Real markets deliver returns in an unpredictable sequence. Sequence of returns risk is the danger that a large loss early in retirement (or the final years of accumulation) permanently damages a portfolio more than the same loss later.
| Year | Portfolio A (bad early) | Portfolio B (bad late) | Both withdraw $40K/yr |
|---|---|---|---|
| Year 1 | −20% | +20% | A loses more after withdrawal |
| Year 2–9 | +10% avg | +10% avg | Same average, different path |
| Year 10 | −20% | −20% | Both get same late loss |
| Outcome | Portfolio depleted sooner | Portfolio survives longer | Same 7% average — different result |
Cash buffer
Keep 1–2 years of expenses in cash or short-term bonds. Avoid selling equities in a downturn to fund withdrawals.
Bond tent
Temporarily increase bonds in the 5 years before and 5 years into retirement ("glide path"), then slowly shift back to equities.
Flexible withdrawals
Cut spending 10–15% in poor market years. The Guardrails method (Kitces/Guyton-Klinger) formalizes this into a rules-based approach with higher starting withdrawal rates.
Bottom line: For long-term accumulators (20+ years out), sequence of returns risk is minimal — time averages it out. For those within 5–10 years of drawing on their portfolio, this risk becomes the dominant concern. Use the FIRE calculator's Monte Carlo simulation to stress-test different return sequences.
The future value above comes from your starting balance, monthly contributions, annual return, compounding frequency, and optional inflation or capital-gains tax adjustments—not a third-party feed. We compound the lump sum and periodic contributions at your chosen frequency, then optionally deflate the ending balance for inflation or subtract tax on total gains. Below are the formulas, the order we follow, and worked examples you can check by hand.
Formulas
| Line | Formula |
|---|---|
| Periodic rate | r = annual return % ÷ 100 ÷ compounding periods per year |
| Total periods | n = years × compounding periods per year |
| Contribution per period | PMT = monthly contribution × (12 ÷ periods per year) |
| Lump sum growth | FV₁ = initial investment × (1 + r)^n |
| Contribution growth (ordinary annuity) | FV₂ = PMT × [((1 + r)^n − 1) / r] |
| Ending balance (nominal) | Future value = FV₁ + FV₂ |
| Inflation-adjusted value | Future value ÷ (1 + inflation % ÷ 100)^years |
| After-tax value | Future value − (max(0, future value − contributions) × tax % ÷ 100) |
| Real return (when inflation enabled) | ((1 + nominal return) ÷ (1 + inflation) − 1) × 100 |
Order of operations
Compound lump sum and contributions
FV₁ + FV₂ at your chosen compounding frequency
We convert your monthly contribution into equal payments per compounding period (e.g. monthly when compounding monthly). The initial deposit and each periodic payment grow at rate r for n periods.
Separate interest from principal
Interest earned = ending balance − (initial + all contributions paid in)
Total contributions include the starting balance plus monthly payments × 12 × years. The difference between ending balance and that principal is total interest earned.
Optional inflation adjustment
Divide ending balance by (1 + inflation)^years
When enabled, we express the ending balance in today's purchasing power. Year-by-year rows use the same deflation factor for each year elapsed.
Optional capital-gains tax
Tax = total gain × your tax rate; after-tax = balance − tax
We apply your rate to total gains (ending balance minus contributions), not to principal. This is a simplified lump-sum tax at withdrawal—not annual tax drag inside the account.
Build the yearly chart
Re-run compound math at each year boundary
Each chart point uses the same inputs with a shorter horizon. Inflation and tax columns apply the same formulas to the balance at that year.
Worked example
$10,000 start · $500/mo · 8.0% return · 20 years · Monthly compounding
Lump sum: $10,000 × (1 + 0.7%/Monthly)^240 periods = $49,268
Contributions: $500/mo → $294,510
$49,268 + $294,510 = $343,778 ending balance
Interest earned: $343,778 − $130,000 contributed = $213,778
| Line item | Amount |
|---|---|
| Initial investment | $10,000 |
| Monthly contribution | $500 |
| Annual return | 8.0% |
| Years | 20 |
| Compounding | Monthly |
| Initial grew to | $49,268 |
| Contributions grew to | $294,510 |
| Ending balance | $343,778 |
| Total contributed | $130,000 |
| Interest earned | $213,778 |
Inflation (3%): With 3% inflation: ending balance in today's dollars → $190,342 in today's dollars (real return ~4.8%).
Tax on gains (15%): With 15% tax on gains at withdrawal → after-tax $311,712.
Lump sum only: Lump sum only: $10,000 invested, no monthly contributions → $49,268.
Higher savings rate: Double contributions: $1,000/mo instead of $500/mo → $638,288 (vs $343,778 at $500/mo).
Constants we use
| Parameter | What we use |
|---|---|
| Default initial investment | $10,000 |
| Default monthly contribution | $500 |
| Default annual return | 8.0% |
| Default horizon | 20 years |
| Default compounding | Monthly |
| Inflation toggle default | 3% |
| Capital-gains tax default | 15% |
What we do not model on this page
We use a constant nominal return and level monthly contributions—we do not model market volatility, fund fees, dividend taxes, account-type rules (401(k), IRA, taxable), dollar-cost averaging timing, rebalancing, withdrawal schedules, or annual tax drag inside the account. Capital-gains tax is applied once to total gains at your rate, not as realized gains each year. Inflation is a flat annual rate, not historical CPI series. Results are illustrative, not investment advice.
Frequently asked questions
Next steps: use your paycheck to invest
Know how much you can invest each month by estimating take-home pay and tax. Then revisit this calculator to see how that amount grows over time.
Disclaimer: This calculator provides estimates only. Investment returns are not guaranteed. Past performance does not guarantee future results. Consult a licensed financial advisor for personalized advice.
Related calculators
S&P 500 historical: ~10% nominal, ~7% real (after inflation).
| Annual return | Time to double |
|---|---|
| 4% | 18 yrs |
| 5% | 14.4 yrs |
| 6% | 12 yrs |
| 7% | 10.3 yrs |
| 8% | 9 yrs |
| 10% | 7.2 yrs |
| 12% | 6 yrs |
72 ÷ return rate = years to double.