Dollar-Cost Averaging Calculator

Dollar-cost averaging calculator for regular investing plans

Dollar-cost averaging (DCA) is the habit of investing the same amount on a regular schedule, such as every month or every week. The idea is simple: instead of trying to guess the best time to invest a lump sum, you spread purchases across time. In volatile markets, this tends to reduce the risk of putting all your money in right before a drop. In strong uptrends, it can also mean you buy some units “too late” compared with investing everything upfront.

This calculator estimates what a DCA plan could look like over a chosen time horizon. You enter a contribution amount, choose a contribution frequency, and add an optional starting lump sum if you already have money invested. Then you set an expected annual return and an optional annual fee. The result shows your estimated ending value, how much you contributed in total, how much of the ending value is growth, and a comparison against investing the same total contributions as a lump sum at the start.

Because real markets move unpredictably, no calculator can tell you what will happen. What this tool does well is give you a clean baseline: if returns were steady over time, how would your plan behave? That baseline is useful for planning affordability, setting expectations, and comparing two funding approaches. If you want a quick answer, use the defaults. If you want a more serious estimate, adjust the return and fee to match your product and risk level, and add inflation to see a “today’s money” version of the future value.

Assumptions and how to use this calculator

• Returns are modeled as a steady compounded rate for the chosen contribution frequency, which smooths real-world volatility.
• Annual fees are approximated by reducing the annual return by the fee rate (a practical shortcut for planning).
• Contributions are assumed to be invested at the end of each period (for example, end of month).
• The lump-sum comparison assumes you invest the same total contributions upfront at the start of the timeline.
• If you include inflation, the calculator estimates “today’s money” by discounting the final value by the inflation rate.

Common questions

Is dollar-cost averaging always better than investing a lump sum?

No. If markets rise steadily, a lump sum invested earlier often ends higher because more money has more time to compound. DCA can still be the better choice when you want to reduce timing risk, when you are investing from income over time, or when you value consistency over trying to time entry points.

What return should I use?

Use a realistic long-run estimate for your portfolio. Broad equity markets have historically delivered positive returns over long periods, but there is no guarantee. If you want a conservative plan, use a lower return. If you are unsure, keep the default, then run a second scenario with a lower number to see how sensitive your outcome is.

How do fees affect the result?

Fees reduce compounding. A small annual fee can materially change long-horizon outcomes because it applies every year. If you know the total expense ratio or platform fee, enter it here. The calculator uses a simplified approach by subtracting fees from your expected return, which is usually good enough for planning.

What if I can’t contribute every period?

This model assumes consistent contributions. If your contributions vary, run the calculator with your typical amount, then rerun with a lower amount as a “bad year” scenario. If you contribute irregularly, your real outcome will sit somewhere between those scenarios.

What does “today’s money” mean with inflation?

Inflation reduces purchasing power. A future value might look large in nominal terms but buy less than it does today. If you add inflation, the calculator estimates the inflation-adjusted value so you can compare it to current costs and goals more honestly.