Real rate of return calculator (after inflation)
Find out how much your investment really earned after inflation, using the Fisher equation, and how much it needs to earn to beat inflation plus the real return you want.
How to useReal return after inflation
How much do I need to earn?
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Real rate of return calculator (after inflation): what it is for
Enter the nominal return, the inflation for the period and the tax rate on the gain. The tool applies the Fisher equation and shows the real return before and after tax, the final amount in today's money and the gain in purchasing power, plus how much the investment needs to earn to beat inflation plus the real return you want.
The calculations run in your browser and are a simulation only; they are not investment advice.
How to use
- Enter the return, inflation and tax.
- See the real return.
- Work out how much you need to earn for your goal.
When to use it
- Checking whether an investment beat inflation.
- Comparing fixed-rate and inflation-linked investments.
- Setting return targets.
Frequently asked questions
How is the real rate of return calculated?
With the Fisher equation: (1 + nominal) ÷ (1 + inflation) − 1. An investment that earned 12% in a year of 5% inflation had a real gain of 6.67%, not 7%, because inflation also applies to the earnings.
Should I use the return before or after tax?
To know how much your purchasing power grew, use the net return, after income tax and fees. The tool has a tax rate field to subtract tax from the nominal gain.
Which inflation figure should I use?
Use your country's official consumer price index, such as the CPI in the United States, accumulated over the same period as the investment.
Is it really free?
Yes, 100% free. No sign-up, no subscription and no usage limits. All Tools123 tools are free and run right in your browser.