What is the historical real return of the S&P 500?

The S&P 500 has returned approximately 10% nominally and 7% in inflation-adjusted terms over long periods. This 7% real return is the basis of most long-term retirement planning.

Why does inflation matter for investing?

Inflation erodes purchasing power. If your investment earns 3% but inflation is 4%, you're actually losing 1% of real wealth annually. Beating inflation is the minimum bar for productive investing.

Inflation-Adjusted Return Calculator (Real Return)

A 10% investment return sounds great — but if inflation is running at 4%, your real purchasing power only grew by about 5.77%. The Inflation-Adjusted Return Calculator (also called the Real Return) shows what your investment is truly worth after inflation erodes purchasing power. This is the number that actually matters for long-term wealth building.

Nominal Return (%)

Inflation Rate (%)

Frequently Asked Questions

Real Return = ((1 + Nominal Return) / (1 + Inflation Rate)) − 1. Often approximated as Nominal − Inflation, but the Fisher equation is more precise.

Related Calculators

💰Inflation Calculator 💰Compound Interest Calculator 💰CAGR Calculator