Investment Fee Analyzer

What is an Investment Fee?

An investment fee, often called an "expense ratio," is an annual fee charged by mutual funds, index funds, and ETFs to cover their operating expenses. It's expressed as a percentage of your total investment and is automatically deducted from the fund's assets, which directly reduces your returns. Want to see how consistent investing grows? Check our Compound Interest Calculator.

How This Calculator Works

This calculator demonstrates the corrosive, long-term impact of fees by comparing two portfolios. It calculates the future value of your investment twice:

1. Portfolio 1 (Higher Fee): It calculates your growth using (Annual Return - Fee 1).
2. Portfolio 2 (Lower Fee): It calculates your growth using (Annual Return - Fee 2).

The "Total Value Lost to Higher Fees" is the simple difference between these two final values. A fee difference of just 0.70% might sound small, but over 30 years, it can cost you tens or even hundreds of thousands of dollars in lost growth. This is because the money you pay in fees is money that is *not* compounding for you year after year.

The "Years of Freedom" Metric

To make the impact of fees more tangible, this tool calculates "Years of Freedom Lost." It takes the total money lost to fees and divides it by your annual retirement spending. This shows you exactly how much longer you might have to work—or how many fewer years your money will last—simply because of high fees.

Why Fees Are So Important

Investment fees are one of the very few things you can actually control as an investor. You can't control what the market will do, but you can choose to invest in low-cost funds (like broad-market index funds, which often have fees of 0.05% or less) instead of high-cost actively managed funds (which can have fees of 0.75% or more).

This calculator shows why that choice is one of the most important decisions you can make for your financial future, potentially affecting your FIRE date.