Investment return calculator

Contributions land at the end of each month and compound at your annual return divided by twelve. That is the standard convention and it is slightly conservative: money invested on the first of the month would earn a little more.

No. A steady annual return is a deliberate fiction. Real markets do not deliver 6% every year, they average something like it across decades of sharp gains and losses. This shows you the shape of compounding, not what your account will hold on a given date.

None of them are modelled. A 6% return with 2% inflation is closer to 4% in today's dollars, and a 0.5% management fee comes off the return, not the balance. For a real-terms answer, set the return to your expected return minus inflation minus fees.

A great deal. The same money in a TFSA grows tax-free, in an RRSP grows tax-deferred, and in a plain account is taxed on gains and dividends each year. This calculator is account-agnostic, so check your TFSA room before assuming you can shelter the whole amount.

Something in the 5% to 7% range for a diversified stock portfolio held for decades, which is why this page starts at 6%. That is a long-run average before inflation, and the honest version of it is wide: the same portfolio has delivered well under and well over that across any given ten-year stretch. Bonds and cash sit lower. If you want a figure you can plan around rather than hope for, run it again a point or two lower and see whether the answer still works.

Because returns compound on a balance that took years to build. In the scenario this page opens on, the first 15 years reach $169,950, and the last 10 add $221,196, more than the entire first stretch. The contributions are identical throughout. This is the whole argument for starting early, and it is also why a horizon cut short loses far more than the years it lost.

More than the percentage suggests, because a fee comes off the return rather than the balance and then compounds against you for the whole horizon. Take the scenario above and shave half a point off the return, roughly a low-cost fund against a bank mutual fund, and the ending balance falls from $391,147 to $360,445. That is $30,701 for half of one percent. To model your own, subtract the MER from the return.

On average a lump sum wins, because the money spends longer invested and markets rise more often than they fall. The gap is smaller than people expect, and it comes with the risk of putting everything in immediately before a fall. Most people are not choosing anyway: contributing monthly out of a paycheque is the only option on the table, and it has the advantage of being automatic, which is worth more over 25 years than an optimal entry point.

Compare the interest rate to the return you are assuming here. Credit card debt at 20% is a guaranteed 20% return for clearing it, which no portfolio reliably beats, so that comes first every time. A mortgage or student loan in the low single digits is the opposite case, and the usual answer is to invest alongside it. Anything in between is close enough that certainty is worth something: paying down debt has no bad years.

The balance keeps compounding, it just stops being topped up, so the loss is the missed deposits plus everything they would have earned. Set the monthly amount to zero and lift the starting amount to whatever you expect to have when you stop, and this will show you what the existing balance grows into on its own. Pausing is much cheaper than withdrawing.