Recurring Investment Calculator
See what investing a fixed amount every month becomes over time. Model your contribution, expected return, time horizon, and an optional annual step-up — and watch how consistency, not any single deposit, builds real wealth.
- Updated Aug 6, 2026
- Reviewed by the BSF CPA Editorial Team
- US accounts & automatic investing
- 10 min read
Recurring investing grows a stream of monthly deposits at compound interest. Invest $500 a month at 8% for 20 years and you’d have about $294,510 — you contributed $120,000, and the other $174,510 is growth. Add a 5% annual step-up and the same plan reaches roughly $428,870.
This is how most Americans actually build wealth: automatic 401(k) deferrals and IRA contributions, invested steadily through every market, letting time and compounding do the heavy lifting.
Recurring Investment Calculator
See what investing a fixed amount every month grows into — with an optional annual step-up as your income rises.
Enter your details and press Calculate to see your investment grow.
How the recurring investment calculator works
A recurring investment — also known as automatic, dollar-cost-averaging investing — works by adding a fixed amount every month and letting the whole balance compound. This calculator steps through the plan month by month: each month your existing balance earns a twelfth of your annual return, then your new contribution is added on top. If you set an annual step-up, the monthly amount increases at the start of every year.
With step-up: Contribution ×= (1 + step-up) once per year
The result separates what you actually paid in (total invested) from the wealth your money generated on its own (gains). For a one-time lump sum instead, use our Lump Sum Calculator; to include fund fees, see the Mutual Fund Returns Calculator.
Why the step-up matters
Most people’s income rises over time, but their investing stays flat. Raising your monthly contribution by even 5-10% a year — roughly in line with pay rises — dramatically increases your final balance, because those bigger contributions still have years to compound. A modest step-up often adds more to your outcome than chasing a slightly higher return, and it’s entirely within your control.
- Dollar-cost averaging: investing the same amount monthly buys more shares when prices are low and fewer when high, smoothing out volatility.
- Automation beats timing: a consistent monthly habit almost always outperforms trying to time the market.
- Start early: the first dollars you invest compound the longest, so time in the market is your biggest advantage.
Frequently asked questions
What is recurring investing? +
What return should I use? +
How does the annual step-up help? +
Is this the same as an automatic mutual fund plan?+
Does it account for inflation or taxes? +
How to read your result
The calculator returns four numbers: your future value, the total you contributed, the wealth gained from growth, and the growth multiple. The gap between what you put in and what you end with is the entire case for investing early and automatically.
In the default plan, you contribute $120,000 over 20 years and end with $294,510 — growth of $174,510 exceeds everything you deposited. The longer the horizon, the more lopsided this gets: the same $500 a month over 30 years reaches about $745,000, of which more than 75% is growth you never contributed.
What recurring investing is
Recurring investing means putting a fixed amount into the market on a regular schedule — usually monthly — regardless of what prices are doing. It is the engine behind every 401(k) payroll deferral, every automatic IRA contribution, and every brokerage auto-transfer.
Its power is twofold. First, compounding works on a growing balance for decades. Second, buying on a fixed schedule is a built-in form of dollar-cost averaging: you automatically buy more shares when prices are low and fewer when they’re high, and you never have to guess the right moment to invest.
Who uses this calculator
- 401(k) and IRA savers projecting the balance their monthly contributions will build.
- New investors setting up their first automatic brokerage transfer.
- Goal planners working backward from a target to the monthly amount they need.
- Anyone modeling a raise-linked step-up — increasing contributions a little each year.
Formula and definitions
With no step-up, this is the future value of an ordinary annuity — a stream of equal monthly deposits compounding at a periodic rate:
- PMT The monthly contribution.
- i The monthly rate — annual return divided by 12.
- N Total number of months (years × 12).
When you add an annual step-up, the calculator raises the monthly contribution by that percentage at the end of each year and keeps compounding — which is why the step-up result is meaningfully higher than the flat one.
The power of the annual step-up
A step-up means increasing your monthly contribution by a set percentage every year — most naturally, in step with your raises. It sounds small but compounds dramatically.
The flat $500-a-month plan reaches $294,510 over 20 years. Raising the contribution just 5% a year — from $500 to $525 to $551 and so on — lifts the ending balance to about $428,870, a 46% improvement, because every increase also gets years of compounding. Many 401(k) plans automate exactly this with an “auto-escalation” setting.
Three worked US examples
$500/month at 8% for 30 years, no step-up
Future value: $745,180 from $180,000 contributed. Thirty years of a consistent, unremarkable $500 a month produces three-quarters of a million dollars — the vast majority of it growth. This is the quiet power of starting early and never stopping.
$1,000/month at 7% for 25 years, no step-up
Future value: $810,072 from $300,000 contributed. A more conservative 7% return, a bigger monthly amount, and a slightly shorter horizon still crosses $800,000 — growth adds over half a million on top of the contributions.
$500/month at 8% for 20 years, 5% annual step-up
Future value: $428,870 from about $198,400 contributed. By nudging the contribution up 5% a year — roughly in line with raises — you end 46% ahead of the flat plan, for increases small enough to barely notice month to month.
Best US accounts for automatic investing
| Account | 2026 limit | Why it fits recurring investing |
|---|---|---|
| 401(k) / 403(b) | $24,500 deferral | Payroll deferrals are automatic and pre-tax; capture the full employer match first. |
| Roth IRA | $7,500 | Automatic monthly transfers; qualified growth is tax-free. |
| Traditional IRA | $7,500 | Tax-deferred; deductibility depends on income and plan coverage. |
| HSA | Varies by coverage | Triple tax advantage; can be invested and auto-funded. |
| Taxable brokerage | Unlimited | Auto-transfers with no limit; ideal once tax-advantaged space is full. |
If your 401(k) offers a match, contributing enough to get all of it is the highest-return move in investing — an immediate 50–100% return no market can promise. Set your deferral to at least the full match, then automate everything else.
Realistic return benchmarks
| Asset | Reasonable long-run rate | Note |
|---|---|---|
| US large-cap stocks (S&P 500) | ~10% nominal / ~7% real | Long-run average; ideal for long horizons. |
| Target-date / 60-40 fund | ~6–7% | Common default in 401(k) plans; lower volatility. |
| Bonds | ~4–5% | For shorter horizons or stability. |
| US inflation | ~2.5% | Subtract for a real, today’s-dollars view. |
This model assumes a steady rate; actual returns arrive as a jagged sequence. That’s fine for a decades-long accumulation plan — recurring investing turns volatility into an advantage by buying more shares when prices fall. But treat the future value as an expected average, not a guarantee.
Common mistakes
- Trying to time contributions. Waiting for a dip to invest usually costs more than it saves. Automatic, scheduled investing beats waiting for a perfect entry.
- Stopping during downturns. Pausing contributions when markets fall means skipping the cheapest shares. Consistency through downturns is where recurring investing earns its keep.
- Never increasing contributions. A flat amount for 30 years leaves large gains on the table. Even a small annual step-up compounds significantly.
- Leaving the match on the table. Not contributing enough to get the full employer match is declining free money.
- Reading nominal dollars as real. A large future value decades out buys less than it appears; adjust for inflation when planning.
- Ignoring fees. A 1% fund fee can consume a six-figure share of a long-term plan. Favor low-cost index funds.
Best practices
Make it invisible
Set payroll deferrals and auto-transfers so investing happens before you can spend the money. Automation beats willpower.
Step up with every raise
Enable 401(k) auto-escalation or manually raise contributions 1–5% a year. It’s nearly painless and compounds.
Match, then max
401(k) to the full match, then HSA/IRA, then back to the 401(k) limit, then taxable. Fill the highest-value space first.
Keep going through downturns
The market falls are when your fixed contribution buys the most shares. Don’t pause when it matters most.
Frequently asked questions
What is a recurring investment?
A fixed amount invested on a regular schedule — usually monthly — regardless of market conditions. Examples include 401(k) payroll deferrals, automatic IRA contributions, and scheduled brokerage transfers.
How is the future value of monthly investing calculated?
With the future value of an annuity formula: FV = PMT × [((1 + i)^N − 1) ÷ i], where PMT is the monthly deposit, i the monthly rate (annual ÷ 12), and N the number of months. $500 a month at 8% for 20 years grows to about $294,510.
What is an annual step-up?
Increasing your monthly contribution by a set percentage each year, ideally in step with raises. A 5% annual step-up on a $500/month, 20-year plan lifts the result from $294,510 to about $428,870 — a 46% gain for small, gradual increases.
Is recurring investing the same as dollar-cost averaging?
Effectively, yes. Investing a fixed dollar amount on a schedule automatically buys more shares when prices are low and fewer when high — that is dollar-cost averaging, built into the habit.
Should I keep investing when the market drops?
For a long-horizon plan, yes. Market declines are when your fixed contribution buys the most shares. Pausing during downturns is one of the costliest mistakes recurring investors make.
How much should I invest each month?
A common guideline is 15% of gross income toward retirement, but start with whatever captures your full employer match, then increase over time. Use the calculator to work backward from your goal to a monthly amount.
Does this include taxes?
No — it projects gross growth, which matches a tax-advantaged account like a 401(k) or Roth IRA. In a taxable account, subtract taxes on dividends and gains from your rate for a realistic figure.
What return should I assume?
For a stock-heavy portfolio over decades, roughly 8% nominal is a reasonable planning figure (10% historical average, tempered for caution). Target-date and balanced funds are closer to 6–7%.
Is it better to invest monthly or as a lump sum?
If you have a large sum available now, investing it at once historically beats spreading it out. But most people invest monthly because income arrives monthly — and that consistency is itself a powerful, low-stress strategy. Our lump sum calculator models the one-time case.
Should I adjust the result for inflation?
For a real-world goal, yes. Enter a real (inflation-adjusted) return, or discount the nominal future value by about 2.5% a year to gauge today’s purchasing power.
Can I use this for a child’s education fund?
Yes. Model monthly contributions to a 529 plan over your horizon to college. Just remember the timeline is usually shorter than retirement, so the compounding runway is smaller.
What if I miss a month?
One missed month barely dents a decades-long plan, but the habit matters more than any single deposit. Automating contributions is the best defense against missed months.
Methodology & sources
Methodology. Future value is computed as an ordinary annuity of monthly contributions compounding at the monthly rate (annual ÷ 12), with any annual step-up applied at year end. Results are nominal — not inflation-adjusted — and gross of taxes and fees. Every figure in the examples was produced by this same engine and independently verified.
- Internal Revenue Service, 2026 retirement plan contribution limits (Notice 2025-67): 401(k) $24,500, IRA $7,500.
- Long-run US equity and inflation averages from standard historical return series covering 1926 to present.
Figures current as of August 6, 2026. Rates and limits change; verify before acting.
Related resources
Calculators
- Compound Interest CalculatorLump sum plus recurring contributions
- Lump Sum CalculatorGrow a single one-time investment
- 401(k) Contribution CalculatorProject your balance with employer match
- Retirement Planning CalculatorThe nest egg your target income needs
- FIRE CalculatorYears to financial independence
- CAGR CalculatorAnnualized growth of an investment
Learn more
- Monthly vs Lump SumWhich way to deploy your money
- Roth vs Traditional IRAWhere recurring contributions compound best
- Finance CoursesInvesting and planning from CPA instructors
- All CalculatorsThe full tool library
Turn a habit into a plan
Automatic investing is the habit; a real strategy is the multiplier. Our courses and CPA-authored guides cover account selection, contribution sequencing, and the tax moves that decide how much you keep.
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The 3-Fund Portfolio: Simplicity That Works
Three funds beat almost every professional. The whole low-cost, index-based system — and the discipline to keep it.
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