Accounting GnomeHow future value works
Future value is the power of compounding: your money earns a return, and then that return earns a return too. With ongoing contributions, each deposit also compounds from the day you make it.
Future Value = Starting amount compounded + future value of every contribution
This calculator compounds monthly and assumes contributions are made at the end of each month. The "expected annual return" is your assumption — markets vary year to year, so treat the result as a projection, not a promise.
Why split contributions vs. growth?
Seeing how much of your future balance is money you put in versus money the market earned is motivating — and it shows why starting early matters. The longer your time horizon, the larger the growth slice becomes relative to your contributions.
Tips
- Small increases to your monthly contribution compound into large differences over decades.
- Use a conservative return assumption (e.g., 5–7%) to avoid over-projecting.
- This is a pre-tax, pre-inflation estimate — your real spending power will be lower.