How to Use This Calculator
- 1
Enter your account details
Input your Betterment account balance, expected annual return (6-8% is typical for diversified portfolios), and investment horizon in years.
- 2
Review your fee impact
The calculator shows three results: Total Fees over your horizon, Portfolio Value (Net of fees), and Fee % of Growth. The insights card breaks down your annual/monthly fee, gross vs. net portfolio value, and how much of your growth goes to fees.
Example Calculation
A beginner investor opens a Betterment account with $50,000 and wants to understand the long-term fee impact over 10 years assuming a 7% annual return.
Account Balance ($)
50,000
Expected Annual Return (%)
7
Investment Horizon (Years)
10
Results
Total Fees Over 10 Yrs
$2,274.06
Portfolio Value (Net)
$96,084
Fee % of Growth
4.70%
Insights card shows annual fee of $125.
Tips
Double Your Balance, Double Your Fees
On a $100,000 balance over 20 years at 7%, total fees jump to $17,686.84 — consuming 6.16% of growth. Compare that to $2,274.06 on a $50,000 balance over 10 years. As your portfolio grows, periodically re-evaluate whether the fee is justified.
Time Horizon Matters More Than You Think
Extending from 10 to 30 years on a $50,000 balance at 7% increases total fee drag from $2,274.06 to $25,794.04 — and the fee share of growth rises from 4.70% to 7.80%. The longer you invest, the more compounding works against you through fees.
Lower Returns Amplify Fee Impact
At 5% annual return instead of 7%, the same $50,000 over 10 years loses $1,918.51 to fees — but that represents 6.10% of growth vs. 4.70% at 7%. In conservative portfolios, the 0.25% fee takes a bigger bite of your gains.
Large Balances Mean Real Dollar Costs
A $500,000 portfolio at 7% over 10 years pays $22,740.62 in total fees — the year-one fee alone is $1,250. At that level, consider whether Betterment's automated services (tax-loss harvesting, rebalancing) save you more than the $1,250 annual cost.
The Betterment Fee Calculator projects how the 0.25% annual advisory fee compounds over time, showing you the real dollar cost on your portfolio.
On a $50,000 balance at 7% returns over 10 years, the fee totals $2,274.06 — reducing your portfolio from $98,358 to $96,084.
How Betterment's Fee Is Calculated
Betterment charges a flat 0.25% annual advisory fee on assets under management.
The core formulas are:
Annual Fee = Account Balance x 0.0025
Monthly Fee = Annual Fee / 12
Total Fee Drag = Balance x (1 + Return)^Years - Balance x (1 + Return - 0.0025)^Years
For a $250,000 portfolio: the annual fee is $625.00, and the monthly cost is $52.08.
Over 10 years at 7%, total fee drag reaches $11,370.31.
Fee Impact at Different Portfolio Sizes
The 0.25% fee scales linearly with your balance but compounds differently over time:
| Balance | Annual Fee | 10-Year Fee Drag (7%) | Fee % of Growth |
|---|---|---|---|
| $50,000 | $125.00 | $2,274.06 | 4.70% |
| $100,000 | $250.00 | $4,548.12 | 4.70% |
| $250,000 | $625.00 | $11,370.31 | 4.70% |
| $500,000 | $1,250.00 | $22,740.62 | 4.70% |
Note that fee % of growth stays constant at the same return rate and time horizon — it depends on the ratio between the fee rate and the return, not the dollar amount.
Time Horizon and Compounding Fee Drag
The longer your investment horizon, the more fees compound against you:
| Horizon | Net Portfolio ($50k, 7%) | Total Fees | Fee % of Growth |
|---|---|---|---|
| 10 years | $96,084 | $2,274.06 | 4.70% |
| 20 years | $184,641 | $8,843.42 | 6.16% |
| 30 years | $354,819 | $25,794.04 | 7.80% |
Over 30 years, fees consume nearly 8% of your total growth — more than triple the 10-year proportion.
This makes the time dimension the most important factor when evaluating whether the 0.25% advisory fee is worth the cost of Betterment's automated services.
Frequently Asked Questions
What is the standard Betterment advisory fee?
Betterment charges 0.25% of assets under management per year for their Digital plan. On a $50,000 balance, that's $125.00/year or $10.42/month.
How does the calculator compute total fees over multiple years?
It compares compound growth with and without the fee: Gross FV = Balance x (1 + Return)^Years, Net FV = Balance x (1 + Return - 0.0025)^Years. The difference is your total fee drag. For $50,000 at 7% over 10 years, gross is $98,357.57 and net is $96,083.51, so total fees are $2,274.06.
Why does fee % of growth increase over longer time horizons?
Because fees compound — each year's fee slightly reduces the base that earns returns in future years. Over 10 years at 7%, fees consume 4.70% of growth; over 30 years, that rises to 7.80% on the same $50,000 starting balance.
Are there other costs besides the advisory fee?
Yes. The underlying ETFs in Betterment's portfolios carry expense ratios typically ranging from 0.05% to 0.15% annually. These are deducted from the fund's assets separately from the 0.25% advisory fee.
Does the fee apply differently across account types?
No, the 0.25% advisory fee rate applies consistently across IRAs, taxable accounts, and trusts under the same service tier. Only the dollar amount changes with your balance.
How do I know if Betterment's fee is worth it?
Compare the fee cost against the value of automated services. On a $500,000 portfolio, you pay $1,250/year. If tax-loss harvesting alone saves you 0.5-1.0% in taxes ($2,500-$5,000), the fee more than pays for itself. For smaller balances like $50,000, the $125 annual cost is competitive with most robo-advisors.