How this calculator works
The model grows each year's opening balance at the supplied pre-fee return, deducts an expense-ratio charge from that grown balance, then adds the year-end contribution. It compares this path with a fee-free investment receiving the same contributions. Actual funds generally accrue expenses throughout the year, so this annual convention is an estimate. The difference in final wealth includes both paid fees and their subsequent investment growth. Reverse modes recover the missing investment, contribution, fee or gross-return assumption. Time-to-target returns the first whole model year at or above the target.
Formula
Net yearly factor = (1+r)(1-f). Balance_next = balance × net factor + contribution. Wealth reduction = fee-free ending value - after-fee ending value; lost growth = wealth reduction - fees paid.
Worked example
$1,000 earning 10% before a 1% annual expense charge becomes $1,089 after one year, versus $1,100 without the charge. After two years with no contributions, it becomes $1,185.921 and the cumulative cash charges are $22.979.
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Frequently asked questions
Is fee drag the same as fees paid?
No. Fee drag includes what those deducted amounts would have earned after deduction.
Should I subtract the expense ratio from a published fund return?
Check the return basis first. Published fund performance often already reflects operating expenses; subtracting them again double-counts costs.
Why enter whole years?
Fees and contributions occur once each model year in this projection, so fractional-year fee timing is not assumed.