See exactly how your savings and investments grow with compound interest. Live growth chart, year-by-year breakdown, Rule of 72. Works for HYSA, 401(k), Roth IRA, S&P 500 investing.
How Compound Interest Actually Builds Wealth
Compound interest is simple to describe and counterintuitive to feel: you earn returns on your returns. Year one you earn 7% on $10,000. Year two you earn 7% on $10,700. By year 30 you’re earning 7% on $76,000. The math gets wild fast.
P = starting amount, r = annual rate, n = compounding periods/year, t = years, PMT = monthly contribution. The calculator above handles all of this — just plug in your numbers.
2026 US account benchmarks
Account
2026 rate/return
Tax treatment
HYSA (online banks)
4.5%–5.0% APY
Taxable
I-Bonds
3.11% (May 2025 — check TreasuryDirect.gov for current rate)
Federal only
401(k) target-date
6%–7% projected
Tax-deferred
Roth IRA (index funds)
7%–10% projected
Tax-free
S&P 500 (historical)
~10%/yr average
Taxable
2026 contribution limits
Roth IRA: $7,500/year ($8,000 if 50+). 401(k): $24,500/year ($31,000 if 50+). HSA: $4,400 individual, $8,750 family. These limits reset every January — max them out before investing in taxable accounts.
The cost of waiting one year
If you’re 30 and invest $6,000 this year vs waiting until next year at 7% return: that one-year delay costs you roughly $45,000 by age 65. Not $6,000. $45,000. That’s compound interest working against procrastination.
Ready to model your retirement number? Our Retirement Calculator pairs 401(k) projections with employer match and Social Security estimates for a complete picture.
Frequently Asked Questions
At the S&P 500's historical average of roughly 10% annually (7% inflation-adjusted), $500/month for 30 years compounds to around $1,130,000. Your total contributions are only $180,000 — the other $950,000 is pure compound growth. And since it's a Roth IRA, you pull all of it out tax-free in retirement. The 2026 Roth IRA contribution limit is $7,500/year ($625/month) — you'd be just under that ceiling.
Most financial planners use 6%–7% for conservative long-term projections and 10% for historical S&P 500 average. The 7% figure accounts for inflation (roughly 3%), giving you a real return. For a 401(k) with a typical target-date fund, 6%–7% is a reasonable planning assumption. If your employer matches — say 50% of contributions up to 6% of salary — factor that in as extra free money on top.
HYSAs in 2026 are paying 4.5%–5.0% APY, compounded daily. On $20,000, daily compounding at 4.8% APY gives you about $20,979 after one year — nearly $1,000 in interest just sitting there. Compare that to a traditional savings account at 0.5% APY, which gives you $100. The FDIC insures both up to $250,000, so there's no reason not to be in a HYSA for your emergency fund and short-term savings.
Divide 72 by your annual return to get years to double. At 7% (typical balanced portfolio): 72 ÷ 7 = 10.3 years to double. At 10% (aggressive/S&P 500): 72 ÷ 10 = 7.2 years. At 4.8% (current HYSA): 72 ÷ 4.8 = 15 years. It also works against you with debt — a credit card at 24% APR doubles what you owe in just 3 years if you're not paying it down. Quick mental math, surprisingly accurate.
Not even close. Starting at 35 with $10,000 and investing $500/month at 7% until 65 leaves you with roughly $650,000. Not as much as starting at 25, but still life-changing money. The real mistake isn't starting late — it's waiting even longer. Every year you delay costs you more than the year before because you're losing the compounding on the compounding. The best day to start was 10 years ago. The second best day is today.
Massively. The same $500/month at 7% for 30 years in a taxable account (assuming 15% capital gains tax on growth) leaves you with about $960,000 after tax. In a Roth IRA — same contributions, same returns — you keep the full $1,130,000 tax-free. That's $170,000 more, just from the account wrapper. Max your Roth IRA ($7,500/year in 2026) and your 401(k) ($24,500/year in 2026) before touching a taxable brokerage for retirement savings.
