How much will $75 a month be worth in 20 years?

$75 a month for 20 years at different returns

The return you actually get depends on where the money is kept. A savings account usually pays less than a stock market investment, but it carries much less risk of falling in value.

The figures assume you pay in at the end of every month and the return is compounded monthly. They ignore charges, tax and inflation, so treat them as a guide.

How the pot grows year by year (5% a year)

Growth speeds up the longer you save, because you earn returns on earlier returns. In the first years most of the pot is your own money; later the growth overtakes what you paid in.

What if you saved a little more than $75?

Small increases make a visible difference over 20 years. The table compares $75 a month with three higher amounts at 5% a year.

What it is worth in today's money

Prices rise over time, so a future pot buys less than the same amount today. If inflation averages 2% a year, the $30,435 at 5% would buy what about $20,482 buys today. At 5% a year, growth reaches half of what you have paid in by about year 16.

Why starting early matters

If you waited 5 years and saved $75 a month for only 15 years at 6%, you would end with about $21,518 instead of $34,008. Those 5 years cost you roughly $12,490, even though you would have paid in only $4,500 less.

A rough guide is the rule of 72: divide 72 by the annual return to estimate how many years it takes money to double. At 6% that is about 12 years.

Where could you keep the money?

Common choices include a 401(k), an IRA, a high-yield savings account or a brokerage account. Retirement accounts such as a 401(k) or IRA have tax advantages, and contribution limits that change every year. Interest and gains in an ordinary taxable account can be taxed.

Money you may need within a few years belongs in cash savings. Money you will not need for ten years or more can take more investment risk, but it can fall in value as well as rise.