Investment Fee Calculator — What Your Expense Ratio Really Costs

How it works

An expense ratio is a fund's annual fee, quoted as a percentage of whatever you hold in it. You never get an invoice — it's skimmed continuously out of the fund's returns, which is exactly why it's easy to ignore and expensive to keep ignoring. A 1.86% fee doesn't cost 1.86% once; it costs 1.86% of a growing balance, every year, and each year's skim also removes all the future growth that money would have earned.

The defaults show the mechanics. Take a $14,109 portfolio growing at 7% a year for 30 years. In a 0.20% index fund it compounds at roughly 6.8% and finishes near $101,539. At a 1.86% fee it compounds at about 5.14% and finishes near $63,465. The gap — about $38,100 — is more than twice the starting portfolio, lost to a number that fits in a footnote. Fees compound exactly like returns; that's the whole problem, and it's the shaded wedge in the chart above. The longer version of this argument, worked line by line, is in what a 1.86% fund fee actually costs you over 30 years.

Most people hold more than one fund, so the fee that matters is the weighted expense ratio: each fund's fee weighted by the dollars sitting in it — the bars above sketch a portfolio like that. ClariFi's fee analyzer computes that weighted MER across every holding automatically, grades it on the same four bands this page uses (A–D) (A ≤ 0.30% · B ≤ 0.80% · C ≤ 1.50% · D above), and shows the 30-year drag on your actual portfolio instead of an example one.

The formula

benchmark = P × (1 + 0.07 − 0.0020)^years     the 0.20% index fund
your fund = P × (1 + 0.07 − fee)^years
cost      = benchmark − your fund              ← rounded to the nearest $100
Grades: A ≤ 0.30% · B ≤ 0.80% · C ≤ 1.50% · D above
Example: $14,109 at 1.86% vs 0.20% for 30 years
         → $101,539 vs $63,465 ≈ $38,100 forgone

Honest assumptions

• Growth is a steady 7% a year before fees — real markets swing around any average. The comparison between the two curves is the point, not the exact endpoint of either.
• The benchmark is a 0.20% fund because broad index funds commonly charge in that neighborhood; a fee at or below 0.20% shows "≈ $0 — already index-level."
• No new contributions are modeled. If you're adding money every month, the dollar gap gets bigger, not smaller.
• Fees are treated as a clean subtraction from return, and the result is rounded to the nearest $100 — this is an estimate of scale, not an account statement.
• This page does arithmetic. It doesn't know your funds — it's a starting point, not a plan, and not advice.

Questions people ask

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ClariFi makes tools, not advice. Nothing on this page is a recommendation to buy, sell, or sign anything.