Projecting your helps you set realistic goals and understand what actions will have the biggest impact on your wealth.
The Net Worth Projection Formula
Future Net Worth = Current Net Worth × (1 + r)^n + Annual Savings × [((1 + r)^n - 1) / r]
Where:
- r = annual return rate
- n = years
Don't worry about the math—our Net Worth Projection tool does it for you.
Key Variables
Starting Net Worth
Your current assets minus liabilities. The higher you start, the more compound growth helps.
Annual Savings
What you add each year. Early in life, this matters more than returns.
Growth Rate
Expected returns on investments:
- Conservative: 5%
- Moderate: 7%
- Aggressive: 9%
Use real (inflation-adjusted) returns for accurate purchasing power projection.
Time Horizon
Years until your target date. Time is the most powerful variable.
Example Projections
Starting Point: $50,000 net worth, $20,000/year savings
| Years | 5% Return | 7% Return | 9% Return |
|---|---|---|---|
| 10 | $333,000 | $376,000 | $425,000 |
| 20 | $832,000 | $1,038,000 | $1,307,000 |
| 30 | $1,610,000 | $2,224,000 | $3,112,000 |
Pro Tip
Notice how the differences compound over time. A 2% difference in returns triples the gap over 30 years.
What Moves the Needle Most?
Early Career (Under 35)
Savings rate dominates. Your portfolio is small, so returns don't add much in dollar terms. Focus on maximizing savings.
| Action | 10-Year Impact |
|---|---|
| +$500/month savings | +$75,000 |
| +2% returns | +$8,000 |
Mid-Career (35-50)
Balance matters. Both savings and returns are meaningful. Optimize both.
Late Career (50+)
Returns dominate. Your portfolio is large enough that 1% extra return can mean more than extra savings.
| Action | 10-Year Impact (from $500k) |
|---|---|
| +$500/month savings | +$75,000 |
| +2% returns | +$150,000 |
Scenario Planning
Run multiple projections:
Best Case
- Returns: 9%
- Savings: Maximum possible
- No major expenses
Expected Case
- Returns: 7%
- Savings: Current rate
- Normal life expenses
Worst Case
- Returns: 4%
- Savings: Reduced rate
- Unexpected expenses
If your worst case still meets your goals, you're in great shape.
Adjusting Your Trajectory
Need to reach goals faster?
Option 1: Increase Savings
- Reduce expenses
- Increase income
- Automate additional savings
Option 2: Increase Returns
- Higher stock allocation (more risk)
- Reduce investment fees
- Tax-efficient investing
Option 3: Extend Timeline
- Work longer
- Delay major purchases
- Accept slower progress
Common Projection Mistakes
Mistake 1: Using Nominal Returns
10% average returns don't mean 10% purchasing power growth. Use 7% (real) for realistic planning.
Mistake 2: Ignoring Sequence Risk
Average returns don't show the impact of when returns occur. Early losses hurt more than late losses.
Mistake 3: Not Updating Projections
Run new projections annually. Life changes, and so should your model.
Mistake 4: Forgetting About Taxes
Projections should account for tax drag on taxable accounts.
Milestones to Track
| Net Worth | Milestone |
|---|---|
| $100,000 | "The hardest hundred" |
| $250,000 | Quarter millionaire |
| $500,000 | "Coast" may be possible |
| $1,000,000 | Millionaire |
| $2,000,000 | Comfortable retirement likely |
The Bottom Line
Quick Win
Use our Net Worth Projection tool to run your own scenarios. See how different savings rates and return assumptions change your trajectory. The visualization makes the power of compounding real.
Projections aren't predictions—they're planning tools. Use them to make informed decisions about saving, investing, and setting goals.