Savings Calculator

Compound interest is often called the "eighth wonder of the world." Unlike simple interest, which is calculated only on your principal, compound interest is calculated on your principal plus all the interest you've already earned. This means your money grows at an accelerating rate over time. The earlier you start saving, the more time your interest has to compound, leading to exponentially larger results. For example, a 25-year-old who saves $500 a month until age 65 will end up with nearly double the wealth of someone who starts at 35, even if they save the same amount per month.

It is also important to consider the impact of inflation. While your balance may grow, the purchasing power of that money will decrease over time. To stay ahead, you should aim for a rate of return that significantly exceeds the average annual inflation rate (typically 2-3%). This is why "investing" in assets like stocks or real estate is often superior to simple "saving" in a bank account for long-term goals. Our calculator allows you to adjust your expected rate of return so you can compare the outcomes of conservative savings accounts versus more aggressive investment portfolios.

Finally, consider the Tax Implications of your savings. In a standard brokerage account, you pay taxes on your interest and capital gains every year. In a "tax-advantaged" account like a 401(k) or a Roth IRA, your money grows tax-free, which can result in a 30-40% larger nest egg over a 30-year period. While our tool provides a mathematical projection of growth, the real secret to success is Consistency. By automating your contributions, you remove the emotional temptation to spend the money, ensuring that your financial future is built one month at a time.