Investment Fee Calculator

How much will fees cost me over time?

Usually more than the percentage suggests. A fee comes out of the whole balance every year, so it compounds against you the way returns compound for you, and the dollars it takes stop growing. In the worked example below, a 0.95% fee leaves $79,546.90 less after 25 years than no fees would, 15.88% of the no-fee balance, though only $46,652.16 of that is fees actually charged.

The calculator runs three balances from the same money and the same return before fees: one with no fees and two with fee setups you choose, Scenario A and Scenario B. Each scenario can have a percentage fee on the balance, such as a fund’s expense ratio plus an advisory fee, and a flat dollar fee per year. You see how far apart A and B end, how much each pays in fees, and how much more each loses because the dollars taken as fees stop growing.

How to use it

• Starting balance: what the account holds now, in dollars. 40,000 and 40k both work. It can be 0 if you add money each year.
• Annual contribution: what you add each year, or 0. It goes in at the end of the year, after that year’s fees.
• Gross annual return: the yearly return before any fees, in percent, for example 6. The same return applies to all three balances.
• Years invested: whole years, up to 100.
• Fees taken: once a year, quarterly or monthly. Each deduction takes a matching share of the yearly fees.
• Annual fee for each scenario: every percentage-of-assets fee added together, in percent: the fund’s expense ratio plus any advisory, wrap or plan fee charged on the balance. Type 0.95 for 0.95%. The line under the field shows the same fee in dollars per $1,000, the way 401(k) fee notices list it.
• Flat fee for each scenario: dollars a year that don’t depend on the balance, such as an account maintenance or plan recordkeeping fee, or 0 if there is none. The line under it shows the fee as a share of your starting balance.

Results update as you type. The Try buttons compare a 0.2% fund with and without a 1% advisory fee, a 0.05% fund with a 0.75% one, a $120 flat fee with 0.25% of the balance, and the example from an SEC investor bulletin. To compare more than two setups, press Save for comparison, change the fees and save again; each saved scenario shows its change from the first. Continue in the Retirement Withdrawal Calculator takes Scenario A’s ending balance there, to see how long it would last.

Where to find what you’re paying

• Fund expense ratio: in the fee table near the front of the fund’s prospectus, listed as total annual fund operating expenses, and on the fund’s fact sheet. FINRA’s Fund Analyzer compares the costs of specific funds.
• Advisory fee: in your advisory agreement, the firm’s Form CRS and the adviser’s Form ADV Part 2A brochure. Advisers most often charge a percentage of the assets they manage, commonly billed each quarter.
• 401(k) or 403(b) plan fees: in the plan’s fee notice, which must explain administrative fees charged to accounts before you first invest and at least once a year. Your statement shows the fees actually charged at least every quarter. Fund expenses are listed both as a percentage and in dollars per $1,000: $9.50 per $1,000 is 0.95%.
• Flat account fees: in the account’s fee schedule, or among the shareholder fees in a fund’s prospectus. Some funds charge an account maintenance fee only on balances below a set amount.

One-time charges such as front-end sales loads and commissions are paid when you buy or sell. They aren’t yearly fees, so don’t enter them as one.

How the calculator applies fees

Each year the balance grows by the gross return, then the fees come out of the grown balance, then the contribution goes in. With fees taken once a year:

$$B_t = B_{t-1}\,(1+r)\,(1-f) - F + C$$

• $B_t$ is the balance at the end of year $t$, and $B_0$ is the starting balance.
• $r$ is the gross annual return and $f$ the percentage fee, both as decimals (0.95% is 0.0095).
• $F$ is the flat fee per year and $C$ the annual contribution, in dollars.

With quarterly or monthly deductions, the balance grows by $g = (1+r)^{1/p} - 1$ each period, which compounds to $r$ over a year ($p$ is 4 or 12), and each deduction takes $f/p$ of the balance plus $F/p$. That takes slightly less than a yearly deduction, because each part of the fee is charged before the rest of the year’s growth. In the worked example below, monthly deductions leave Scenario B with $421,628.41 instead of $421,315.01, $313.40 more.

Fees can never take more than the balance. If a flat fee is larger than a small balance, the calculator takes what is there, leaves the account at $0 and marks that year in the table. A fee equal to or above the return needs no special case either: the balance simply shrinks, and the result says so.

The SEC’s fee bulletin illustrates $100,000 growing 4% a year for 20 years with fees of 0.25%, 0.50% and 1.00%, ending at about $208,000, $198,000 and $179,000. With fees taken once a year, this calculator gives $208,413.03, $198,211.30 and $179,213.48 (the “SEC bulletin example” button shows all three in the table of Scenario B at other fees).

Worked example: 0.2% plus $50 a year vs. 0.95%

$40,000 is invested and $6,000 is added at the end of each year for 25 years, at 6% a year before fees, with fees taken once a year. Scenario A is a fund with a 0.2% expense ratio in an account that charges a $50 flat fee each year. Scenario B is an option charging 0.95% with no flat fee.

1. Year 1 with no fees: $40,000 × 1.06 = $42,400.00, plus the $6,000 contribution is $48,400.00.
2. Scenario A: fee = 0.002 × $42,400.00 + $50 = $134.80, so the balance is $42,400.00 − $134.80 + $6,000 = $48,265.20.
3. Scenario B: fee = 0.0095 × $42,400.00 = $402.80, so the balance is $42,400.00 − $402.80 + $6,000 = $47,997.20.
4. Repeating this for 25 years gives $500,861.90 with no fees, $480,156.07 for Scenario A and $421,315.01 for Scenario B. Scenario A ends ahead by $58,841.07.

Scenario B’s fee in year 25 is almost 10 times its first-year fee, because it is a percentage of a balance that grew. Scenario A’s $50 flat fee stays $50: it is 0.125% of the $40,000 starting balance but only about 0.01% of the ending balance.

For Scenario B to end level with A, its investments would have to earn 6.77% a year before fees instead of 6%, 0.77 percentage points more every year.

Fees paid vs. growth lost: two ways to count the cost

Fees paid are the dollars the fund, adviser or plan collects. Growth lost is what those dollars would have earned if they had stayed invested. Together they make the shortfall, which answers “how much less will I have?” With fees taken once a year, the shortfall is each year’s fee grown at the gross return to the end:

$$\text{shortfall} = \sum_{t=1}^{T} \text{fee}_t\,(1+r)^{T-t}$$

In the worked example, Scenario B pays $46,652.16 in fees, and those dollars would have grown by another $32,894.74, so B ends $79,546.90 below the no-fee balance. Early fees cost the most: B’s $402.80 fee in year 1 would have grown to $1,630.91 by year 25 at 6%.

Statements can show fees charged to your account, but a fund’s expense ratio is paid out of fund assets, so it never appears as a charge. Neither statement shows growth lost. If returns are negative, the dollars taken as fees would have lost value, so the shortfall comes out smaller than the fees paid.

How much does a 1% fee cost over 30 years?

On the worked example’s $40,000 plus $6,000 a year at 6% before fees, a 1% fee leaves $564,488.61 after 30 years instead of $704,088.76: $139,600.15 less, or 19.83% of the no-fee balance, of which $73,918.61 is fees paid. The dollar figure depends on your balance, contributions and return, which is why the calculator asks for yours.

For a single deposit with nothing added, the share lost doesn’t depend on the return at all: after 30 years a 1% yearly fee leaves $0.99^{30}$ = 73.97% of the no-fee balance, a loss of 26.03%. Regular contributions lower the share, because later deposits pay the fee for fewer years.

Expense ratios, advisory fees and flat account fees

• Expense ratio. A fund’s yearly operating expenses as a percentage of its average net assets. It is deducted from the fund’s assets instead of arriving as a bill, which lowers the fund’s returns, so a return taken from the fund’s own record already reflects it.
• Advisory fee. A percentage of the assets an adviser manages, charged to your account on top of the funds’ own expenses.
• Retirement plan fees. The costs of running a 401(k) or 403(b) can be passed to participants in addition to the expenses of the plan’s funds.
• Flat fees. The same dollars at any balance, so they weigh most on small accounts. A flat fee and a percentage fee cost the same at a balance of flat fee ÷ percentage: $120 a year against 0.25% breaks even at $120 ÷ 0.0025 = $48,000.

Add the percentage layers and enter the total: a 0.2% fund in an account charging 1% for advice is 1.2%. Adding slightly overstates two stacked fees, since 1 − 0.998 × 0.99 is 1.198%, but the difference is small.

The “$120 flat vs 0.25%” button starts from $30,000 at 7% for 30 years with nothing added. The percentage fee is under $120 for the first 7 years and above it from year 8, and the flat-fee account pulls ahead in year 15. After 30 years it holds $217,032.36 against $211,846.71.

Reading the result

• The headline is how far ahead the scenario with the higher ending balance finishes, in dollars.
• With no fees, Scenario A and Scenario B are the three ending balances. Under each scenario are its fees paid and its shortfall against no fees.
• Return needed to end level is the gross return the scenario that ends lower would need, every year, to match the other one.
• Fees paid and growth lost splits each shortfall in two and adds the fees in the first and last year and the growth a year left after the percentage fee.
• How this was calculated works year 1 through with your numbers (the first month or quarter for more frequent deductions) and ends with the same balances as FV spreadsheet formulas where one applies.
• The year-by-year table and chart show all three balances and the fees paid to date. Download the table as a CSV file.
• Scenario B at other annual fees reruns the calculation with B’s percentage fee at 0% to 2% and at yours, with everything else fixed. The “A minus B” column shows where B would overtake A.
• Warnings appear above the result when a fee takes all of the return or when the fees took the whole balance in some year.

Assumptions and limitations

• One steady return. Real returns change from year to year. For a single deposit, the share lost to a percentage fee doesn’t depend on the order of good and bad years; with yearly contributions, the order changes the dollar amounts.
• Contributions at year end. Money added through the year would pay a little more in fees than this shows.
• Fixed fees. Fees stay the same for the whole period. An adviser’s percentage can depend on the size of the account, so if yours changes at a certain balance, rerun with the fee that applies there.
• Costs left out. Sales loads, commissions, trading costs inside a fund, taxes and inflation aren’t included. All amounts are in future dollars.
• Cost, not value. The calculator counts what fees take, not what they pay for. It is an educational estimate, not investment advice.

Common mistakes

• Counting the expense ratio twice. A return taken from a fund’s own track record is already net of its expense ratio. Enter only the other fees then, or use an index’s return and include the expense ratio.
• Typing the per-$1,000 figure as a percentage. A plan notice showing $5.00 per $1,000 means 0.5%, not 5%. The calculator flags fees of 3% or more.
• Leaving out a layer. An advisory, wrap or plan fee is charged on top of the funds’ expense ratios. Add them together.
• Subtracting the fee from the return. Growing Scenario B at 6% − 0.95% = 5.05% gives $425,420.54 after 25 years instead of $421,315.01, $4,105.53 too much, because the fee is also taken from each year’s growth: 1.06 × 0.9905 is 1.04993, not 1.0505.
• Judging over a few years. Most of the gap between two fees opens in the later years, when the balance is largest. Compare over the time you expect to stay invested.