A million dollars in 30 years will not buy what a million dollars buys today. Calculate the true "real" inflation-adjusted purchasing power of your investment portfolio.
Enter your values, then select Calculate Now
Calculates Real Annual Return using the Fisher Equation: Real Rate = [(1 + Nominal Rate) / (1 + Inflation Rate)] - 1. Calculates Nominal Future Value (FV_nom) and Real Future Value (FV_real) in today purchasing power. Purchasing Power Loss = FV_nom - FV_real.
While your account balance shows nearly $820k, it will purchase the equivalent of about $391.5k of today groceries, housing, and goods.
Enter your starting investment principal.
Input your regular monthly contribution.
Set your nominal investment return rate (e.g. 8-10% for equities).
Input the projected annual inflation rate (standard benchmark is 2.5% to 3.5%).
Review nominal dollar totals compared directly side-by-side with real today-dollar purchasing power.
The Fisher Equation mathematically relates nominal return, real return, and inflation: (1 + Real) = (1 + Nominal) / (1 + Inflation). It is far more precise than simply subtracting inflation from nominal returns.
At a 3% annual inflation rate, prices double roughly every 24 years. Money sitting in cash without earning interest loses half its purchasing power over that timeframe.
Equities (stocks), real estate, commodities, and inflation-indexed bonds (TIPS or I-Bonds) historically deliver returns exceeding inflation over long periods.
Yes! Increasing your monthly investment contribution by 2-3% each year will help maintain constant real contributions over multi-decade spans.
Over the past 100 years, the US Consumer Price Index (CPI) has averaged approximately 3.1% per year.
Discover other tools to optimize your wealth strategy
Simulate how your investments grow exponentially over time. Support for initial principal, regular monthly additions, custom compounding frequencies, and annual return rates.
Calculate your retirement nest egg. Project your future nest egg balance at retirement age, estimated monthly retirement spending, and whether you face a retirement shortfall.
Simulate multi-decade investment horizons. Calculate capital appreciation, total contributions, and the exact tipping point where investment gains exceed annual earnings.
Forecast your long-term financial position. Model expected salary growth, annual expense inflation, and cumulative savings accumulation over multi-year horizons.