Why the real figure sits next to the nominal one
A thirty-year projection that reports only the headline balance flatters itself badly. Money in the future is not money today, and the difference over a long horizon is not a rounding detail — at 2.5% inflation, a sum thirty years out is worth roughly half what the same number means now.
That is why both figures appear above and always will. The nominal number is what the account statement will say. The real number is what it will actually buy, and it is the one worth planning around. A projection showing a large nominal total while quietly assuming three decades of inflation away is not being helpful.
Contributions matter more than returns, early on
Over shorter horizons the balance is dominated by what you put in, not what it earns. The crossover, where cumulative growth first exceeds cumulative contributions, typically arrives somewhere past the fifteen-year mark at ordinary rates — and the split above shows you exactly where your own scenario sits.
The practical implication is that arguing over a percentage point of return is far less productive than increasing the contribution in the early years, when there is little balance for a better return to work on. The order flips later: once the balance is large, returns dominate and contributions become the smaller lever.
What a constant rate hides
This model applies the same return every month. Real markets do not, and the difference matters in a specific way: while you are only contributing, the order of good and bad years is largely irrelevant to the final balance. Once you begin withdrawing, it stops being irrelevant. A poor sequence of early returns during withdrawals can permanently damage a portfolio that would have survived the same returns in a different order — the reason this is treated as a distinct risk in retirement planning rather than folded into an average.
Treat the output as arithmetic on your assumptions rather than a forecast. Change the return by two percentage points and see how far the answer moves; if the plan only works at the optimistic end, it is not really a plan. The retirement calculator extends this through the withdrawal phase, and the inflation calculator handles purchasing power on its own.
Frequently asked questions
Should I look at the nominal or the real figure?
The real one, for planning. Nominal is what the statement will say; real is what it will buy. Over thirty years at 2.5% inflation the two differ by roughly half.
When does growth overtake what I have contributed?
At ordinary rates it usually happens somewhere past year fifteen, though it depends on your contribution and return. The split of contributions against growth is shown above for your own figures.
Does this account for market ups and downs?
No \u2014 it applies a constant rate. While you are only contributing, the order of returns barely affects the final balance. Once you are withdrawing it matters a great deal, which is why the retirement calculator treats the two phases separately.