Free Financial Tool
Investment Return Calculator
Calculate nominal, inflation-adjusted, and after-tax returns. Compare against S&P 500, 60/40, and bond benchmarks.
Benchmark Presets
Typical for taxable brokerage: 0.5–1.5% annual tax drag
Nominal Final Value
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Real Value (today's $)
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After-Tax Value
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Total Return
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CAGR
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Total Invested
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Total Growth
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Inflation Loss
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Nominal vs. Inflation-Adjusted vs. Contributions Only
How the Investment Return Calculator Works
The calculator models monthly compounding with regular contributions. Three scenarios are calculated: nominal growth, inflation-adjusted growth, and contributions-only (no return).
// Monthly compounding:
r_monthly = rate / 12
FV = P(1+r)^n + PMT × [(1+r)^n - 1] / r
// Real value (Fisher equation):
realFV = FV / (1 + inflation)^years
// CAGR:
CAGR = (FV / totalInvested)^(1/years) - 1
Worked Example — S&P 500 (10.5%)
Start with $10,000, add $500/month, 10.5% return, 20 years, 3% inflation:
- Total contributed: $130,000
- Nominal value: ≈ $490,000
- Real value (today's dollars): ≈ $271,000
- Inflation erodes: ~$219,000 of nominal purchasing power
- CAGR on total invested: ≈ 7.0%
Frequently Asked Questions
What is a good investment return?▾
The S&P 500 has historically returned ~10.5% nominal (7–8% real after inflation). A diversified 60/40 stock/bond portfolio averages ~7.5% nominal. Individual bonds average 4–5%. 'Good' depends on risk tolerance — higher returns require accepting more volatility.
What is CAGR and how is it calculated?▾
CAGR (Compound Annual Growth Rate) is the smoothed annual rate that takes you from initial to final value. CAGR = (FinalValue / InitialValue)^(1/years) - 1. It's useful because it strips out the noise of year-by-year volatility and gives one representative annual figure.
How does inflation affect investment returns?▾
Inflation erodes purchasing power. If you earn 8% nominal but inflation is 3%, your real return is only about 4.85%. A $100,000 investment growing at 8% for 30 years nominally becomes $1,006,266 — but in today's dollars at 3% inflation, that's only $415,000 of real purchasing power.
What is tax drag on investments?▾
Tax drag is the annual reduction in returns from paying taxes on dividends, interest, and realized capital gains in taxable accounts. A 1% annual tax drag on a 7% return means you effectively earn only 6%, costing you significantly over time. Tax-advantaged accounts (401k, IRA) eliminate this drag.
What is the difference between nominal and real return?▾
Nominal return is the actual % gain on your investment. Real return adjusts for inflation: Real Return ≈ Nominal Return - Inflation Rate (Fisher equation: exact formula is (1+nominal)/(1+inflation) - 1). Real return measures actual purchasing power gained.
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Example Scenarios — See the Real Numbers