Inflation-Adjusted Returns
See how inflation changes the real buying power of an investment over time. Compare the headline (nominal) growth to what it's actually worth in today's dollars.
Assumptions
10 yrs
Presets:
Nominal vs Real Growth
Starting
$100,000
Nominal
$215,892
Real
$160,644
Nominal is the headline dollar value ignoring inflation. Real is the equivalent value in today's dollars after removing the effect of inflation.
| Year | Nominal value | Real value (today's $) | Cumulative inflation |
|---|---|---|---|
| 0 | $100,000 | $100,000 | 0.0% |
| 1 | $108,000 | $104,854 | 3.0% |
| 2 | $116,640 | $109,944 | 6.1% |
| 3 | $125,971 | $115,281 | 9.3% |
| 4 | $136,049 | $120,878 | 12.6% |
| 5 | $146,933 | $126,746 | 15.9% |
| 6 | $158,687 | $132,898 | 19.4% |
| 7 | $171,382 | $139,350 | 23.0% |
| 8 | $185,093 | $146,114 | 26.7% |
| 9 | $199,900 | $153,207 | 30.5% |
| 10 | $215,892 | $160,644 | 34.4% |
Headline Numbers
Future value (nominal)
$215,892
What your statement might show after 10 years at 8.0% nominal.
Future value (real)
$160,644
Equivalent in today's dollars, after inflation.
Real annual return
4.9%
Annualized return after subtracting inflation.
Inflation Erosion
Nominal ending value$215,892
Real ending value (today's $)$160,644
Lost buying power$55,248
Over this horizon, about 25.6% of your future nominal dollars are just keeping up with inflation rather than increasing your real wealth.
Quick Takeaways
- • At 8.0% nominal and 3.0% inflation, your real return is about 4.9% per year.
- • If inflation were 0%, your real and nominal returns would match. The higher inflation runs, the more important that real return becomes.
- • Use this tool to sanity-check long-term projections — a "million dollars" in 30 years may not buy what it does today.