Why Inflation-Adjusted Returns Matter
Your investment might show 8% annual returns, but if inflation is 3%, your real purchasing power only grows by about 4.85%. This calculator shows the true growth of your wealth in today's dollars, giving you a realistic picture of future buying power.
Nominal vs Real Returns
Nominal returns are the raw percentage gain. Real returns subtract inflation's impact. Over 20 years at 8% nominal with 3% inflation, $25,000 grows to $116,524 nominally but is only worth $64,459 in today's purchasing power. The $52,065 difference is inflation's hidden tax.