Inflation-adjusted Return Calculator
A 9% return with 6% inflation is not a 9% return. See what your money is really earning once inflation and tax have taken their share.
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How it works
Tax comes off the return first, because you are taxed on the nominal gain, not the real one. What is left then has to beat inflation before you have gained any purchasing power at all.
The correct adjustment is not simply subtracting inflation from the return — that approximation drifts as rates rise. The Fisher relation divides the two growth factors, which is what this calculator uses.
Real return = (1 + nominal after tax) ÷ (1 + inflation) − 1
- Nominal — the headline return your investment reports
- After tax — nominal × (1 − tax rate)
- Real — what remains once inflation is taken out — the only figure that buys anything
Worked example
100,000 at a nominal 9% for 10 years, 6% inflation, 20% tax on returns
Inputs
Results
Ten years of 9% turns 100,000 into 236,736 on paper — and just 111,915 in purchasing power. Nearly the whole gain went to inflation and tax.
Frequently asked questions
Why not just subtract inflation from the return?
It is a decent approximation at low rates and increasingly wrong as rates rise. At 9% and 6% the shortcut gives 3%; the correct calculation gives 2.83%. Over decades that gap compounds into a real difference.
Should tax come off before or after inflation?
Before. Tax authorities charge you on the nominal gain, including the part that merely kept pace with inflation. That is why a high-inflation environment quietly raises your effective tax rate.
What is a realistic long-run inflation figure?
Use your own experience rather than the headline index — your personal rate depends heavily on housing, education and healthcare costs. Many people find their real rate runs above the published one.
Is my data sent anywhere?
No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.
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