Why are costs deducted from the return rather than the contribution?

Because that is how ongoing costs work. A fund TER and a percentage custody fee are charged on the whole balance under management, not on the new contribution. They grow as the portfolio grows — which is why the cost gap at the end is much larger than the sum of the fees paid.

Why is the cost gap bigger than the fees paid?

Every unit paid out as a fee can no longer earn a return. The calculator therefore reports the difference between the two final values: the fees paid plus the return they would have earned. Over 25 years that second part is often larger than the first.

What return should I assume?

We deliberately do not give you a target number. Broad equity indices historically delivered roughly 5 to 8 percent nominal per year, with heavy volatility and long drawdowns. Run several scenarios — and remember that a constant return is a strong simplification.

Are taxes and inflation included?

No. Every figure is nominal and pre-tax. Capital gains tax, notional-income charges and withholding tax reduce the outcome further, as does inflation: at 2 percent, a final value 25 years out has roughly 60 percent of today's purchasing power.

What counts as annual cost?

Anything charged continuously as a percentage of assets: the fund or ETF TER, a percentage custody or platform fee, and any discretionary management fee. Flat order fees per savings-plan execution do not belong here — the ETF savings plan calculator handles those.

Calculators

Compound interest calculator

What regular contributions turn into over the years.

Compounding runs in both directions. The same mechanism that turns 250 a month into a six-figure portfolio over decades also turns a 0.8% fee into a five-figure sum. This calculator plots both curves side by side — with and without costs — and fills the space between them. That space is what your portfolio actually costs.

Your plan

Monthly compounding, contributions paid at the end of each month.

Starting capital

Monthly contribution

Expected return p.a.6 %

Before costs. Broad equity indices delivered 5–8% nominal over long periods.

Time horizon25 years

Annual cost0.8 %

Fund TER plus custody or platform fee, in percentage points of return.

Currency

Assumptions

The return is treated as constant. Real markets do not behave that way, and the order of good and bad years changes the outcome materially.
Costs are deducted as percentage points from the annual return, so they apply to the whole balance, not only to new contributions.
Tax on distributions, capital gains and notional income is not included and reduces the result further.
Inflation is ignored — every figure is nominal, not in today's purchasing power.
Front-end loads, per-execution order fees and currency effects are not included.

Final value after costs

€186,183

What is left once the ongoing costs have been taken out.

Total contributions: €85,000
Investment gains: €101,183

Without costs

€211,991

Year: 25 years

What costs took

€25,808

The gap between the cost-free result and the result after costs — including the return the money removed could no longer earn.

Share of the gross result: 12.2 %

Growth and the cost gap

Without costs
Cost gap
After costs
Contributions

Note: These calculators are for information only and are not investment advice. Content on Brokaro is for information purposes only and is not investment, legal or tax advice.

How this is calculated

The model runs monthly: the balance is compounded at the effective monthly rate and the contribution is added at the end of each month. The monthly rate is the twelfth root of the annual rate rather than the annual rate divided by twelve, which would double-count compounding inside the year.

Formula

Final value = start × (1 + i)^n + contribution × ((1 + i)^n − 1) / i, where i = (1 + return − cost)^(1/12) − 1 and n = months

The second curve is the same plan with costs set to zero. The hatched band between them is the cost gap: the fees paid plus the return that money could no longer earn. To see how that number moves at a different provider, the fee calculator carries the actual custody charges.

A constant return is an arithmetic assumption, not a forecast. Real markets deliver good and bad years in an arbitrary order, and for contribution plans that order changes the outcome noticeably.