Question 1

If I put $500/month into a Roth IRA for 30 years, what do I end up with?

Accepted Answer

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.

Question 2

What return should I use for a 401(k) projection?

Accepted Answer

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.

Question 3

How does compound interest work in a high-yield savings account?

Accepted Answer

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.

Question 4

What's the Rule of 72 and how do I actually use it?

Accepted Answer

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.

Question 5

I'm 35 and just starting to invest. Is it too late to build real wealth?

Accepted Answer

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.

Question 6

Does it actually matter if I invest in a taxable account vs a Roth IRA?

Accepted Answer

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.

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

Compound Interest Calculator

What You Should Know

Charts & Projections

Portfolio Mix

Growth Scenarios

Wealth Over Time

Overview

How Compound Interest Actually Builds Wealth

The real formula — with monthly contributions

2026 US account benchmarks

2026 contribution limits

The cost of waiting one year

Frequently Asked Questions

Sources & Methodology

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