You enter an initial lump sum, a monthly contribution, an expected annual return, an expense ratio, and a holding period in years. The tool computes the future value twice — once at the gross return rate and once at the net rate (gross minus expense ratio) — using the standard future-value formula with monthly compounding. The difference between the two is the lifetime dollar cost of fees. It assumes constant returns, no taxes, no inflation adjustment, and no fund distributions or rebalancing.
Index funds and ETFs typically charge 0.03%–0.20%. Actively managed funds generally charge 0.50%–1.50%. A difference of even 0.5% can cost tens of thousands of dollars over a 30-year investment horizon due to compounding.
No — this calculator projects pre-tax growth. In a taxable account, capital gains distributions and eventual withdrawals would reduce your net return. Tax-advantaged accounts (401k, IRA) defer or eliminate some of that drag.
A broad U.S. stock index has historically returned roughly 7%–10% annually before inflation. A balanced stock/bond portfolio is typically lower (5%–7%). Use a conservative estimate and remember that past performance does not guarantee future results.
No — the fund deducts the expense ratio gradually from the fund's net asset value throughout the year. You never see a line-item charge; it's reflected in a slightly lower daily return compared to the gross return of the underlying assets.
Fees reduce your balance each year, so you earn less on a smaller base the next year. Over 30 years, a 1% expense ratio on a $10,000 investment growing at 7% can cost over $30,000 in lost growth — nearly three times the original investment.
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.