Inflation Adjusted Return Calculator
Strip inflation out of investment returns to show the real growth rate and today-dollar purchasing power.
Convert nominal returns to inflation-adjusted real returns instantly. Free real return calculator with purchasing-power projection.
Calculator Inputs
About Real Returns
Strip inflation out of investment returns to show the real growth rate and today-dollar purchasing power.
A 8% return with 3% inflation is not 5% — compounding makes it (1.08/1.03) − 1 ≈ 4.85%. This calculator applies the exact Fisher relation, then projects both the nominal balance and its purchasing power in today’s dollars.
The gap between those two numbers is inflation’s lifetime tax on savers. Use the real rate for any multi-year planning; nominal figures flatter long horizons. All math runs in your browser.
Where it is used
Setting retirement targets in today’s dollars, comparing assets across inflation regimes, and sanity-checking “high” nominal yields.
How to use the Real Returns
- Starting Amount — enter the value (e.g. 100000).
- Nominal Annual Return (%) — enter the value in % (e.g. 8).
- Annual Inflation (%) — enter the value in % (e.g. 3).
- Years — enter the value (e.g. 10).
- Calculate — press the Calculate button to see the result instantly above.
Formula
Real rate = (1 + nominal) / (1 + inflation) − 1. Real value = P × (1 + real)^years.
Examples
Example
Frequently Asked Questions
- Why not just subtract inflation from the return?
- Subtraction is an approximation that drifts over long horizons. The exact relation divides growth factors: (1 + nominal)/(1 + inflation) − 1.
- Which inflation number should I use?
- Long-run CPI (about 2–3% in the US) for planning. For personal accuracy, track your own basket — housing and healthcare often outrun CPI.
- Can the real return be negative?
- Yes — whenever inflation exceeds the nominal return, purchasing power shrinks. Cash at 0.5% with 3% inflation loses about 2.4% real per year.