Investment Fee Drag Calculator

Estimate the impact of percent-of-assets fees on investment growth.

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Parameters

Initial Investment ($)

Monthly Contribution ($)

Gross Annual Return (%)

Expected return before any fees are applied.

Annual Fee / AUM (%)

Management, advisory, or expense ratio fee.

Benchmark Fee (%)

Compare against a low-cost alternative (e.g., Index Fund).

Years to Grow

Annual Contribution Growth (%)

Adjust for Inflation (Real Dollars)

💡 How it works: Fees don't just cost you the money you pay out. They also cost you the compounding returns that money would have earned if it stayed in your account.

Methodology: Fees are calculated and deducted monthly (1/12th of annual rate) on the growth-adjusted balance prior to new contributions, mirroring standard AUM billing practices.

Potential Balance

Compared to benchmark

Net Balance

After fees are deducted

Total Lost to Fees

0% of potential value

Excess Fees Paid

Above benchmark

Lost Compounding Returns

Growth Breakdown Over Time

Year-by-Year Schedule

Year	Benchmark Balance	Net Balance	Excess Fees (Cum.)	Lost Returns (Cum.)

Important Disclaimer
For educational and informational purposes only. This tool does not constitute financial, investment, tax, or legal advice. All projections are purely hypothetical and are not guarantees of future performance. Please consult a qualified financial professional before making investment decisions.

Key Assumptions of this Calculator:

Constant Returns: The calculator assumes a fixed, steady rate of return. It does not account for market volatility or sequence of returns risk, which can significantly impact real-world outcomes.
Fee Calculation: Fees are calculated and deducted monthly (1/12th of the annual rate) based on the growth-adjusted balance prior to new monthly contributions, mirroring typical Assets Under Management (AUM) billing.
Contributions: Additions to the principal are assumed to be made at the end of each month.
Taxes Excluded: This model illustrates gross fee drag and does not account for capital gains taxes, dividend taxes, or income taxes upon withdrawal.
Inflation: If adjusted for inflation, the discount rate is applied smoothly to estimate future real purchasing power. It does not auto-escalate the nominal contribution amounts unless specified in the "Annual Contribution Growth" input.