Money guide
What will your investments actually be worth?
A projection is an assumption with a calculator attached. Here is what the assumptions do, why a single percentage point of fees costs so much more than it sounds, and the risk that averages hide.
Every growth projection you have ever seen has the same structure: a starting balance, a contribution, a rate, a number of years. Three of those you know. The rate you do not, and it is the one doing all the work.
That does not make projections useless. It makes them useful in a specific way — for understanding sensitivity, not for predicting a balance.
What the assumptions actually do
Run $25,000, plus $500 a month, for 25 years, and change only the return:
- At 5%: about $386,000
- At 7%: about $551,000
- At 9%: about $800,000
A four-point spread in the assumption doubles the answer. Nobody can tell you which of those three is right. The long-run US figures give you a reference point — 10.02% a year for the S&P 500 with dividends reinvested over 1928 to 2025, and 4.54% for 10-year Treasuries — but your 25 years are one sample from that distribution, not the average of it.
So the honest use of a projection is: run it three times. Pessimistic, central, optimistic. If your plan works in all three, it is a plan. If it only works in the optimistic one, it is a hope with a spreadsheet.
Fees, and why the number is bigger than it looks
A 1% annual fee sounds like it costs 1%. It does not. It costs 1% of the balance every year, and the balance it is taken from is the balance that would otherwise have been compounding.
On the $25,000-plus-$500-a-month example over 25 years at 7%, moving from a 0.05% fund to a 1.00% fund costs roughly $86,000 — not because the fees themselves totalled that, but because the fees plus everything those fees would have earned did.
The comparison worth knowing: in 2025, actively managed equity mutual funds averaged 0.64% on an asset-weighted basis, while index equity funds averaged 0.05%.
The investment growth calculator shows the fee drag as its own line, which is the only way to see it, because it never appears as a charge you notice.
The risk that averages hide
An average return says nothing about the order the returns arrive in, and the order matters enormously once you are withdrawing.
Two retirees each average 7% over 20 years. One gets the bad years early and the good years late; the other gets the reverse. While they are only contributing, they end up in the same place. Once they are drawing an income, the first one can run out and the second one does not — because selling assets into a falling market locks in the loss permanently.
This is called sequence-of-returns risk, and it is why "the market averages X%" is a much weaker statement than it sounds when applied to a decumulation plan. A projection that shows a smooth curve is showing you the average, not the experience.
Nominal versus real
A projection showing $551,000 in 25 years is showing you 25-years-from-now dollars. At 2.5% inflation, those dollars buy what about $297,000 buys today.
Neither number is wrong. But the retirement income you are planning has to be spent in future dollars, so compare like with like: either inflate your spending target, or deflate the projection. Doing neither is how people arrive at a number that looks sufficient and is not.
What to do with this
- Run three scenarios, not one. The spread is the information.
- Check what you are paying in fund expenses. It is on the fund page, it takes a minute, and it is the highest-leverage change available to most investors.
- Look at the inflation-adjusted line, not the nominal one, for anything more than a few years out.
- Do not change the plan because of the projection. Change the inputs you control — the contribution and the cost. The return is not an input you control, however precisely the calculator lets you type it.
A projection is a sensitivity analysis wearing the clothes of a forecast. Used as the first, it is one of the most useful tools available. Used as the second, it is a way of being confidently wrong about a large number.
Sources: long-run returns from Aswath Damodaran's dataset at NYU Stern, 1928 to 2025; fund expense ratios from ICI Research Perspective 32, no. 1 (March 2026), "Trends in the Expenses and Fees of Funds, 2025", Figure 6. Both read from the same constants the calculators use. Growth figures computed with this site's own code.