Investing
Expense Ratio Impact
See what a fund's yearly fee takes out of your ending balance over decades, side by side with a cheaper fund.
What this means
Over 30 years, the 1% fund leaves you about $82,694 behind the 0.03% fund. That's 19.1% of what the money would have grown to with no fee, gone.
The fee itself looks tiny each year. The real cost is that every dollar paid in fees also stops growing, year after year. A fund has to beat its cheaper rival by the fee difference every single year just to break even, which is hard to keep up over decades.
Build on it
These are estimates to help you think, not personalized legal, tax, or investment advice, and not a promise of any result.
This calculator shows what a fund's expense ratio, the yearly fee taken out of your return, costs you over time. Enter your starting balance, monthly contribution, years and an assumed return before fees, then two expense ratios to compare, and it shows the ending balance for each, the dollars lost to fees and the share of your balance they took.
Why it matters: you never get a bill for an expense ratio. It comes out of the fund quietly every year, so a fee that sounds tiny is easy to ignore. Over decades it compounds against you, and the gap between a low-cost fund and an expensive one can be a large share of your retirement savings.
How to use it
Enter your plan
What you have invested now, what you add each month and how many years until you'll use the money.
Set the return before fees
An assumed yearly return. Both funds get the same one, so the only difference between them is the fee.
Enter the two expense ratios
Find each on the fund's fact sheet or your 401(k)'s fee disclosure. Compare a fund you hold against a lower-cost option for the same kind of investment.
Behind the numbers
Fees compound too
Every dollar paid in fees is a dollar that stops growing. Over a long horizon, the growth those dollars would have earned is usually bigger than the fees themselves.
Small percentages, big dollars
An expense ratio is a percent of your whole balance, every year, not a percent of your gains. As the balance grows, so does the dollar amount of the fee.
Cheaper isn't the only thing that matters
Compare funds that hold similar investments. A low fee on a fund that doesn't fit your goals isn't a bargain. But between two funds that do the same job, the cheaper one starts every year ahead.
The math behind it
The return after fees is the return before fees minus the expense ratio. The calculator grows your balance and monthly contributions at that rate, and again with no fee at all. The dollars lost to fees are the difference between the no-fee balance and each fund's balance.
Worked example
$10,000 to start plus $300 a month for 30 years, at an assumed 7% before fees. A fund charging 0.03% ends around $444,000. A fund charging 1% ends around $362,000. That's about $83,000 less, and the 1% fund lost roughly 19% of what the money would have grown to with no fee.
Fee times years
Multiply the fee by the years for a rough ceiling on the share of a lump sum it eats. 1% for 30 years is about 30%; the real figure for a lump sum is a little lower, around 26%, and lower still when you add money over time.
Common questions
What's a good expense ratio?
Broad index funds often charge well under 0.1% a year. Actively managed funds commonly charge more. What matters is the difference between options that do the same job, which this calculator turns into dollars.
Where do I find a fund's expense ratio?
On the fund's fact sheet or prospectus, on your brokerage's fund page, or in the annual fee disclosure your 401(k) plan sends you.
Can I lower the fees in my 401(k)?
You're limited to the plan's menu, but most plans include at least one low-cost index fund. Compare the expense ratios of the options in the same category and consider the cheaper one.
Go deeper
The calculator gives you a number. The Investing Brick teaches you what to do with it, in plain English. And if you’re not sure where to start, the free BrickScore Assessment checks your whole foundation in about 5 minutes.
first the number, then the move