Investment Inflation Calculator
Don't be misled by large future numbers. This tool helps you understand what your retirement or savings goal is actually worth by stripping away the effects of inflation.
Why should I adjust my investment returns for inflation?
Inflation reduces the purchasing power of your money over time. While your account balance may grow, the goods and services you can buy with that money will cost more. Adjusting for inflation gives you a more realistic view of your future wealth in "today's dollars."
What is the "Real Rate of Return"?
The real rate of return is the annual percentage return on an investment after adjusting for inflation. It is approximately calculated as: Nominal Return Rate - Inflation Rate.
What is a realistic inflation rate to use?
Historically, the US inflation rate has averaged around 3% per year. However, it can fluctuate significantly. Many long-term planners use a range of 2% to 4% for their projections.
How does inflation affect long-term savings?
Over long periods, even low inflation has a massive impact. At 3% inflation, the value of a dollar is cut in half in about 24 years. This is why investing in assets that outpace inflation is critical for retirement planning.