Inflation and real returns

Last updated: 2026-08-14

Nominal returns show the money amount before adjusting for purchasing power. Real returns account for inflation, which can make a future balance worth less than it looks in today's dollars.

Why inflation matters

If prices rise over time, a larger future balance may not buy as much as the number suggests. Real-value estimates help compare future money with today's spending power.

Do not treat it as a forecast

Inflation assumptions are estimates. Testing several rates can show whether a plan is sensitive to purchasing-power changes.

Use the calculator

Use the investment return calculator to see ending value in today's dollars, or the retirement calculator for long-term planning estimates.