Taxes and inflation quietly shrink returns. See the real rate you actually keep.
A real after-tax return calculator shows what your investment return is actually worth after taxes and inflation take their share, the return that reflects real purchasing power.
A headline return overstates what you keep. Taxes reduce it first: your after-tax return is the nominal rate times one minus your tax rate. Inflation reduces it again, because rising prices erode the value of your gains. The real after-tax return is what's left, and it's often far lower than the number you started with.
Focusing only on nominal returns can make an investment look better than it is. A 7% return taxed at 20% and eroded by 3% inflation leaves a real return closer to 2.5%. Understanding this helps you set realistic expectations and appreciate the value of tax-advantaged accounts, which remove the tax drag.
A return adjusted for inflation, so it reflects actual purchasing power. A real after-tax return also subtracts the effect of taxes.
Taxes take a share of your gains, and inflation erodes what's left. Together they can turn a solid nominal return into a modest real one.
Use tax-advantaged accounts to remove the tax drag, keep costs low, and choose investments that historically outpace inflation over time.
See the exact formula and a worked example on our methodology page.