Long-term fee calculator

How this is calculated

What it calculates

How much ongoing costs (such as a fund's annual expense ratio (TER)) eat into the possible final value over the years.

Your inputs

• Starting amount and monthly contribution: as in the compound interest calculator, paid at the start of each month.
• Return before costs, per year: the assumed growth before any costs come off.
• Ongoing cost per year, in percent: for example a fund's total expense ratio.
• Time horizon: in years.

The calculation

The calculator runs the savings plan twice with the compound interest formula (monthly compounding): once with the return, once with the return minus costs.

Final value without costs = savings-plan formula with the return
Final value with costs = savings-plan formula with (return − costs)
Eaten up = without − with
Share = eaten up ÷ final value without costs

Simplification: costs are subtracted directly from the annual return (7% − 1.5% = 5.5%) instead of being deducted from the portfolio as an amount each month. That closely matches how ongoing fund costs work. One-off costs such as order fees are not included: use the broker cost calculator for those. No taxes, no inflation.

What the result means

Ongoing costs apply to your whole portfolio, including returns from earlier years. That is why the share they eat up grows with time. A seemingly small percentage turns into a large amount over decades.

Example

Default values: €10,000 starting amount, €200 a month, 7% return, 1.5% costs, 30 years. Without costs: about €326,582. With costs, i.e. calculated at 5.5%: about €235,434. Eaten up: €91,149 to 27.9% of the possible final value.