Inflation Adjusted Return Calculator

Real returns matter more than nominal returns when planning long-term investments and retirement.

The Fisher equation calculates real return: (1 + nominal rate) / (1 + inflation rate) - 1.

Historically, US stocks have provided average real returns of 7% after adjusting for 3% inflation.

Inflation compounds just like investment returns, significantly impacting long-term purchasing power.

Different asset classes respond differently to inflation - real estate and commodities often hedge against it.

Consider inflation when comparing investment options - a 5% return with 3% inflation equals 2% real growth.

High inflation periods can turn seemingly positive nominal returns into negative real returns.

TIPS (Treasury Inflation-Protected Securities) automatically adjust for inflation to preserve purchasing power.

International investments face both local inflation and currency exchange rate changes.

During retirement planning, assume 3-4% average inflation to estimate real future purchasing power needs.