Real Return Calculator (After Inflation)

A common approximation is real return ≈ nominal return minus inflation (the Fisher relationship is slightly more precise for exact math). If your portfolio averages 7% and inflation averages 3%, your long-run real return is roughly 4% before taxes and fees.

It applies compound inflation to a dollar amount, showing future nominal equivalents and purchasing power. That illustrates why earning 1% in a savings account while inflation is 3% means losing about 2% in real terms each year—you need returns above inflation to grow wealth in buying-power terms.

For forward-looking planning, use an expected rate (many planners use 2.5-3%). For historical what-if analysis, use average realized CPI over your period. TIPS and I-bonds explicitly tie to inflation; stocks and corporate bonds do not.