Real Return After Inflation Calculator
Work out the real, inflation-adjusted return on Australian savings or investments after subtracting the effect of inflation on purchasing power.
Your results
Calculation breakdown
- Fisher equation
- Real return = ((1 + nominal return) ÷ (1 + inflation)) − 1
Worked example
A 5% nominal return with 3.2% inflation gives a real return of about 1.74%, meaning your purchasing power still grows, just more slowly than the headline rate suggests.
Assumptions
- Uses the compounding Fisher equation rather than a simple subtraction of the two rates.
- Inflation should reflect your expected rate over the same period as the return.
How this calculator works
A nominal return can look attractive but still lose purchasing power once inflation is factored in. Enter your nominal annual return and the current inflation rate to calculate your real rate of return, showing whether your savings are genuinely getting ahead or just keeping pace with rising prices.
Frequently asked questions
How is real return calculated?
This calculator uses the Fisher equation: real return = ((1 + nominal return) ÷ (1 + inflation)) − 1, which is more precise than simple subtraction.
What inflation rate should I use?
Use the latest CPI figure from the Australian Bureau of Statistics, or your own expected long-term inflation assumption.
Can real return be negative?
Yes, if inflation exceeds your nominal return, your money loses purchasing power even though the account balance still grows.
Results are estimates only and are not financial, tax, legal or credit advice.