Calculate the future value of your retirement savings with a crucial twist: see both your projected account balance AND its actual purchasing power after inflation.

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    Interpretation Guide

    Why “Today’s Money” Matters

    Most calculators only show you the Nominal Value—the actual dollar amount you will see in your bank account in the future. While accurate, this number can be misleading because inflation erodes the value of money over time.

    • Nominal Balance: The amount of money you will have.
    • Purchasing Power: What that money can actually buy, expressed in today’s prices.

    How to use this tool

    1. Current & Retirement Age: Determines your “Time Horizon” (how long the money has to grow).
    2. Annual Return: The stock market (S&P 500) has historically returned about 10% annually (before inflation), or 7% (after inflation).
    3. Inflation Rate: The historical average is roughly 3%. This calculator adjusts your purchasing power based on this input.

    The Math Behind It

    We calculate your future balance using the standard compound interest formula, but the “Purchasing Power” calculation adjusts for inflation using the Real Rate of Return (Fisher Equation):

    $$ r_{real} = \frac{1 + r_{nominal}}{1 + i_{inflation}} - 1 $$

    Where:

    • $r_{real}$ is the Inflation-Adjusted Return Rate.
    • $r_{nominal}$ is your expected investment return.
    • $i_{inflation}$ is the expected annual inflation rate.