Finance

Retirement Return on Investment Calculator (5 Years)

Calculate return on investment as a percentage. This retirement version uses a 5-year planning term as its starting point.

The Return figure is the total gain or loss on the amount invested, expressed as a percentage of that amount, over the full 5-year term: a positive figure means the final value is above the amount invested, a negative figure means it is below it, and because it is a total rather than a yearly rate, the same percentage means a slower yearly pace when it is spread over a longer term.

Formula

Return equals final value minus invested amount, divided by invested amount, times 100.

How it works

A positive return means the final value is higher than the amount invested.

Worked example

Amount invested $10,000, final value $15,000, term 5 years. Using the page formula, return equals $15,000 minus $10,000, divided by $10,000, times 100, which is $5,000 divided by $10,000, times 100, which is 50.00 percent. That is the calculator's own result for these defaults.

Spreading that 50.00 percent total evenly over 5 years gives a simple average of 10.00 percent a year. That average is an illustration only, not the output of this page: it is not compounded and it is not an annualised return. It is shown so the same total can be judged fairly over different terms.

Who this term suits for a retirement saver: a saver a few years from retirement checking one short, defined investment, such as a lump sum set aside for clearing a small remaining mortgage balance, funding the first years of retirement spending, or building a reserve for home help soon after stopping work, where the return must be judged quickly before retirement starts.

FAQs

What is a good ROI?
There is no single good figure. Compare returns over the same period and with the same risk before deciding.

Is this retirement calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 50 percent a good return for a retirement investment over only 5 years?
Over only 5 years, 50 percent is a strong total, equal to a simple average of 10.00 percent a year, but it says nothing about risk, fees, or whether the final value will still cover retirement costs after inflation.

Why does the same 50 percent look stronger over 5 years than over longer terms?
Because the gain is earned in less time. The same $5,000 gain spread over 5 years averages 10.00 percent a year, while over 40 years it averages only 1.25 percent a year, so the term changes what the headline means.

Should a near-retiree judge a 5-year retirement investment on ROI alone?
No. Near retirement, check the risk of loss, whether the money is needed soon, and what fees and taxes apply, because a good percentage on paper does not help if the fund falls just before it is needed.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.