Brokerage Account Calculator: Project a Taxable Investment Balance
Project how a taxable brokerage account could grow — the flexible account with no contribution limits and no withdrawal age rules.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year growth schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Future value | Total contributions | Total interest earned |
|---|---|---|---|
| $15k · $400/mo · 8% · 20yr | $309,510.21 | $111,000.00 | $198,510.21 |
| $0 · $600/mo · 7% · 25yr | $486,043.02 | $180,000.00 | $306,043.02 |
| $100k · $1k/mo · 6% · 15yr | $536,228.07 | $280,000.00 | $256,228.07 |
| $5k · $200/mo · 9% · 30yr | $439,801.58 | $77,000.00 | $362,801.58 |
How This Calculator Works
Enter the current balance, the average annual return you expect, the years invested, and your monthly contribution. The calculator compounds the balance monthly and adds each contribution, showing the projected balance and the growth that compounding produced.
The Formula
Future Value with Regular Contributions
P = starting amount, PMT = monthly contribution, r = monthly rate (annual ÷ 12), n = number of months
Worked Example
With $15,000 invested, $400 added monthly, and an 8% average return over 20 years, a brokerage account reaches about $309,500. Contributions make up $111,000; investment growth supplies the other $198,500.
Key Insight
A brokerage account trades the tax advantages of a retirement account for total flexibility: contribute any amount, withdraw at any age. The trade-off is that dividends and realized gains are taxed along the way.
Taxable vs tax-advantaged accounts — the priority order
U.S. accounts hierarchy for most efficient wealth building. (1) 401(K)/403(B) MATCH — free money from employer; always contribute enough to capture full match. (2) HEALTH SAVINGS ACCOUNT — triple tax advantage (deductible contribution, tax-free growth, tax-free qualified withdrawal). (3) ROTH IRA — tax-free growth and qualified withdrawals. (4) 401(K)/403(B) BEYOND MATCH — tax-deductible contributions with tax-deferred growth.
(5) TAXABLE BROKERAGE — only after exhausting tax-advantaged options. Income from taxable brokerage taxed annually; long-term capital gains 15-20%; qualified dividends 15-20%. For high earners, NIIT adds 3.8% surcharge on investment income above thresholds.
Most U.S. workers under-utilize tax-advantaged accounts. 2024 contribution limits: 401(k) $23,000 + $7,500 catch-up if 50+; IRA $7,000 + $1,000 catch-up. Maxing these accounts before allocating to taxable brokerage is highly efficient — tax savings of 22-37% federal + state on contributions plus tax-deferred growth produce substantial advantage over taxable accounts.
Tax-efficient investing in taxable accounts
For taxable accounts, certain investments are more tax-efficient than others. (1) BROAD INDEX ETFs — minimal distributions; tax-efficient by structure (in-kind redemption mechanism). VTI (US Total Stock), VXUS (International), BND (US Bonds) are highly tax-efficient. (2) MUNICIPAL BONDS — federal tax-exempt (state-exempt if your state). Best for high-bracket investors in taxable accounts.
Less tax-efficient: (1) ACTIVELY MANAGED MUTUAL FUNDS — higher turnover produces capital gain distributions even when investor hasn't sold. (2) BOND FUNDS — interest taxed as ordinary income (higher rate than capital gains). (3) REITs — REIT dividends taxed as ordinary income (not qualified dividend treatment).
Asset location: place tax-inefficient investments (bonds, REITs, active funds) in tax-advantaged accounts (401k, IRA). Place tax-efficient investments (broad index ETFs, individual stocks held long-term) in taxable accounts. This 'asset location' optimization can add 0.5-1.5% to after-tax returns for diversified investors with both account types.
Investment tax treatment — federal capital gains and dividends (2024)
Reference U.S. federal tax rates on investment income for taxable brokerage accounts.
| Income type | 0% rate income (single) | 15% rate income | 20% rate income |
|---|---|---|---|
| Long-term capital gains | Up to $47,025 | $47,026-$518,900 | $518,901+ |
| Qualified dividends | Up to $47,025 | $47,026-$518,900 | $518,901+ |
| Short-term capital gains | Taxed as ordinary income | — | — |
| Non-qualified dividends | Taxed as ordinary income | — | — |
| Interest income | Taxed as ordinary income | — | — |
| Municipal bond interest | Tax-exempt federal (state may apply) | — | — |
| NIIT surcharge | n/a | Added at $200K single income | Added at $200K single |
Married filing jointly thresholds approximately 2× single. NIIT (Net Investment Income Tax) adds 3.8% surcharge on investment income above $200K (single) / $250K (MFJ) — high-income investors face effective long-term capital gains rate of ~23.8% federal. State tax adds on top. California high earners face combined federal+state capital gains tax of ~37%.
Frequently Asked Questions
What is a taxable brokerage account?
It is a standard investment account with no contribution limits and no age rules for withdrawal. Unlike a retirement account, its dividends and realized gains are taxed.
How is a brokerage account taxed?
Dividends and interest are taxed in the year received, and selling an investment for a profit creates a capital gain. The projection here shows pre-tax growth.
Why use a brokerage account over a retirement account?
For flexibility. There are no contribution caps and no penalty for withdrawing before retirement age, which suits goals other than retirement.
Should I fill retirement accounts first?
Often yes. Tax-advantaged accounts and any employer match usually come first; a brokerage account is a common place for investing beyond those limits.
How can I reduce the tax drag?
Holding investments longer for lower long-term capital gains rates, and limiting frequent selling, both reduce the tax a taxable account incurs.
When is this calculator unreliable?
When not accounting for tax drag (taxable account returns reduced 1-2% annually by tax on dividends and realized gains — substantial over decades). Also unreliable when assuming constant returns (S&P 500 annual returns range -38% to +37% — sequence of returns matters greatly), or when ignoring asset location opportunities (placing tax-efficient assets in taxable, tax-inefficient in tax-advantaged adds 0.5-1.5% to after-tax returns).
References & Authoritative Sources
- U.S. Securities and Exchange Commission (SEC) — Investor Information on Brokerage Accounts · consulted June 1, 2026 · Federal regulator investor guidance
- Internal Revenue Service (IRS) — Publication 550 — Investment Income and Expenses · consulted June 1, 2026 · Federal tax treatment of investment income
- Damodaran Online (NYU Stern) — Historical Stock, Bond and Bill Returns · consulted June 1, 2026 · Authoritative long-run U.S. return data
Related Calculators
Data Sources & Benchmarks
This calculator draws on 3 independent, dated sources. The starting values for expected annual return are taken from the benchmarks below and refresh whenever the snapshots are updated.
Methodology & Review
Brokerage account growth uses compound interest formula with expected return. The calculator returns balance projection. Brokerage accounts (taxable) hold investments outside retirement accounts. Common holdings: stocks, bonds, mutual funds, ETFs. Returns subject to: dividends (taxed annually); realized capital gains (taxed when securities sold); unrealized gains (untaxed until sold). For long-term planning, assume 6-7% real return (~10% nominal) for stock-heavy portfolio; 2-3% real for bond-heavy. RELIABILITY: Reliable for documented current value with constant return assumption. Less reliable as forward projection because (a) returns vary substantially year-to-year (S&P 500 has had years from +37% to -38%); (b) tax drag in taxable accounts reduces effective return by 1-2% annually for stock-heavy portfolios; (c) inflation must be subtracted for real growth.
Updated