Lump Sum vs Dollar-Cost Averaging Calculator

Test investing a windfall all at once against spreading it over months, with 2,000 simulated markets.

The question after a windfall

If you receive a bonus, an inheritance or a sale, do you invest it at once or in equal steps over several months? Spreading it out feels safer, because you avoid putting everything in just before a drop. But markets rise more often than they fall, so money waiting in cash often earns less.

How the simulation works

It runs 2,000 simulated futures with random monthly returns around your average. In each one, the lump sum is invested on day one. The other plan invests equal parts each month while the rest earns the cash yield. After the years you choose, it compares both results and counts how often the lump sum wins.

How to read it

With positive average returns, the lump sum usually wins about two thirds of the time. The 10th percentile rows show the bad-luck case, where spreading out can protect you. The right choice also depends on how much regret a sudden drop would cause.

Worked example

With the starting values (Amount to invest: 100000, Months to spread it over (dollar-cost averaging): 12, Years to compare: 10, Average yearly return (%): 8, Yearly ups and downs: volatility (%): 16, Yield on cash while waiting (%): 3), the calculator shows Lump sum beats spreading it out in: 60% of futures. Also: Median result: invest it all now: $198,547.62; Median result: spread over 12 months: $195,081.47; Bad future (10th percentile): all now: $106,840.34. Change the inputs above to see your own result.

Last reviewed November 2026. Formulas are standard and shown in the sections above; results are estimates.

Tips and common mistakes

A shorter spread, such as 3 to 6 months, gives up less return.
Try lower returns or higher volatility to see where spreading helps.
Use it for a bonus or inheritance. Regular paycheck investing is already spread out.