Real Return Calculator
Strip inflation out of your investment return.
Real return
3.88%
Per year, after inflation
Ending nominal
$38,697
Ending real (today's $)
$21,426
Lost to inflation
$17,271
Real return uses the Fisher equation: (1 + nominal) / (1 + inflation) - 1. Subtracting inflation from nominal is a quick approximation, not exact.
About
A 7% return when inflation is 4% is really 2.88%, not 3%. Most people subtract inflation from return, but the right way is the Fisher equation. This calculator does it correctly and shows what your money actually buys at the end.
How to use
- Enter your nominal return (what your account shows).
- Enter the inflation rate over the same period.
- See your real return and what your dollars actually grew to in today's money.
FAQ
Why isn't real return just nominal minus inflation?+
That's a close approximation but compounds incorrectly. The Fisher equation is (1 + nominal) / (1 + inflation) - 1. The difference matters at high inflation.
Where do I get inflation data?+
US CPI is published monthly by the Bureau of Labor Statistics. The 2020-2024 average was about 4.5%. Long-run average is closer to 3%.