How to Plan Your Monthly Investment
Dollar-cost averaging (DCA) means investing a fixed amount every month regardless of market conditions. This calculator reverses the future value annuity formula to tell you exactly how much you need to invest each month to hit your target.
The formula used is PMT = FV x r / [(1+r)^n - 1], where FV is your target amount, r is the monthly return rate (annual rate / 12), and n is the total months. A longer time horizon dramatically reduces the monthly amount required thanks to compounding.
For realistic planning, consider reducing your expected return by 1–2% to account for fund fees, taxes, and market uncertainty.
Frequently Asked Questions
U.S. stock index funds have historically averaged around 7–10% per year before inflation. For a conservative plan, 5–6% is a reasonable assumption. Bond-heavy portfolios might use 3–4%.
No — this calculator shows gross returns only. In practice, reduce your expected return by 0.5–1.5% to account for expense ratios, capital gains taxes, and other costs.