Investment Return Calculator in Texas

Texas's median household income is $79,721/year. Investing 15% ($11,958/year = $997/month) at a 7% annual return grows to: $165,217 after 10 years, $490,224 after 20 years, $1,129,562 after 30 years. Over 30 years, $358,740 in contributions generate $770,822 in investment gains — the 15% savings rate compounds to nearly 3.1× the amount invested.

CAGR (Compound Annual Growth Rate) is the smooth annual rate at which an investment would need to grow to reach its ending value from its beginning value in a given period. Formula: CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1. Example: $10,000 grows to $20,000 in 10 years → CAGR = (20,000 ÷ 10,000)^(1/10) − 1 = 2^0.1 − 1 = 7.18%. CAGR smooths out annual volatility to give a single, comparable return figure. The S&P 500's 10-year CAGR as of recent years has been approximately 12–14% nominally; long-run (since 1926) CAGR is approximately 10% annually.

Texas has no state income tax, so investment gains in a taxable brokerage account are subject only to federal capital gains tax (0%, 15%, or 20% depending on income and holding period). For most investors, the federal long-term capital gains rate is 15%. On a 7% gross return, the after-federal-cap-gains return is approximately 6% annually in Texas — a meaningful advantage over states where gains are also taxed at the state level.

For diversified equity portfolio planning: 7% nominal is a widely used conservative long-run assumption (approximately the historical S&P 500 nominal return minus a 2–3% buffer for uncertainty and fees). The actual S&P 500 long-run nominal return (since 1926) is approximately 10%; after 3% inflation, the real return is approximately 7%. For a 60/40 stock-bond portfolio, 5–6% nominal is more realistic. For a money market or HYSA, 4–5% is achievable in the current rate environment but will change over time. Use 7% as a baseline for long-term projections; model at 5% and 9% to understand the range of outcomes.

The order of operations is the same in every state, but generally recommended everywhere: (1) Capture the full 401(k) employer match first — immediate 50–100% return. (2) Max an HSA if eligible — triple tax advantage. (3) Max a Roth or Traditional IRA ($7,000/year in 2026). (4) Return to the 401(k) up to the $23,500 limit. (5) Invest in taxable brokerage accounts for amounts beyond these limits. In Texas (no state income tax), the federal tax savings from tax-advantaged accounts still provide significant benefit.