What if I increase my savings every year?
Start with a monthly amount and raise it a little each year — see how much faster the total grows.
After 20 years you would have
$39,679
- You put in
- $39,679
- Saved in the first year
- $1,200
- Your saving every month in year 20
- $253
Year by year
| Year | Total saved |
|---|---|
| 1 | $1,200 |
| 2 | $2,460 |
| 3 | $3,783 |
| 4 | $5,172 |
| 5 | $6,631 |
| 10 | $15,093 |
| 15 | $25,894 |
| 20 | $39,679 |
Assumptions behind this result
- You save $100 every month, added at the end of each month.
- No interest or investment growth — just the money you put away.
- Each year you save 5% more every month than the year before.
- Inflation, taxes and fees are not taken into account.
Raising your saving a little every year — when your income goes up, say — changes the total more than it seems it should. Start with a monthly amount, choose the yearly increase, and compare it with keeping the amount the same by setting the increase to 0%.
How it is worked out
Every period, your balance first grows by the period's share of the yearly rate, then your saving is added. With growth set to 0, the total is simply your saving multiplied by the number of periods.
A yearly rate is turned into a rate per period that compounds back to the same yearly figure — 6% a year becomes about 0.487% a month, not 0.5% — so changing how often you save does not change the yearly return.
If you raise your saving each year, the new amount applies from the first period of the following year.