Find out what annual return your investments must earn to hit a target. Enter your goal, the years you have, what you have saved and what you add each period, and the calculator solves for the required return, shows the real return after inflation, and compares how more savings or more time lowers the bar.
Last updated:
Goal
$
What you have and add
$
$
Optional
%
%
Shows the real (after-inflation) return needed.
Enter your values to see the result.
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How to use the Required Rate of Return Calculator
Enter your savings goal and how many years you have to reach it.
Enter what you have saved now and the amount you add each period.
Choose how often and when you contribute (monthly at the end of the month is common).
Optionally add a yearly raise in contributions and expected inflation.
Read the required annual return, then use the scenario grid to see how saving more or waiting longer changes it.
The math behind the required return
Goal = PV × (1 + i)n + PMT × ((1 + i)n − 1) ÷ i
PV = what you have saved today
PMT = contribution per period (multiply the second term by (1 + i) if you contribute at the start of each period)
n = number of periods, i = return per period
With only a lump sum the answer is simple: annual return = (goal ÷ PV)1/years − 1. Doubling $50,000 to $100,000 in 10 years needs 20.1 − 1 = 7.18% a year. With regular contributions the equation has to be solved numerically, which this calculator does for you.
Lump sum growth multiples by return and years
How many times a single deposit grows at different yearly returns. Find the multiple your goal needs to see the rough return required.
Annual return
5 years
10 years
20 years
30 years
3%
1.16×
1.34×
1.81×
2.43×
5%
1.28×
1.63×
2.65×
4.32×
7%
1.40×
1.97×
3.87×
7.61×
9%
1.54×
2.37×
5.60×
13.27×
11%
1.69×
2.84×
8.06×
22.89×
If the required return looks too high
Add time. Moving the target date out by five years often cuts the required return by a percentage point or more.
Raise contributions over time. Increasing savings with each pay rise lowers the return you need without a big change today.
Revisit the goal. A goal in today's money grows with inflation; make sure you are not double-counting by also using a high nominal return.
Do not chase returns. Higher expected returns come with more risk and bigger swings, which matter most when the deadline is near.
Frequently asked questions
How is the required rate of return calculated?
The calculator uses the future value equation FV = PV(1 + i)^n + PMT × ((1 + i)^n − 1) ÷ i and searches for the per-period rate i that makes the future value equal your goal. There is no closed-form solution when you have both savings and contributions, so it is solved numerically, then converted to an effective annual rate with (1 + i)^periods − 1.
Is a required return of 10% realistic?
Long-run returns depend on the asset mix and the period measured, and future returns are uncertain. Broad stock markets have had long stretches above and below 10%, while bonds and cash have usually earned much less. If your required return is higher than a diversified portfolio could reasonably earn, consider saving more, extending the timeline or lowering the goal.
What is the difference between the nominal and real required return?
The nominal return is what your account must earn in dollars. The real return removes inflation: (1 + nominal) ÷ (1 + inflation) − 1. If you need 7% and inflation is 3%, the real return needed is about 3.9%.
Why does the required return fall so much when I add years?
Compounding works on time. Each extra year gives your savings and earlier contributions another year of growth and adds more contributions, so the same goal needs a lower rate.
What does a negative or 0% required return mean?
It means your current savings plus contributions already add up to the goal without any growth. You could hold safer, lower-return assets and still get there, as long as inflation does not erode the goal.
Is the required rate of return the same as in CAPM?
No. In corporate finance, the required rate of return often means the minimum return investors demand for risk, estimated with models like CAPM. This calculator answers a personal finance question: what return your own plan needs to reach a specific amount.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.