How do taxes and inflation impact my investment return?

Taxes and inflation can have a dramatic effect on the growth of an investment. Use this investment return calculator to determine the impact taxes and inflation can have on the purchasing power of your investment.

Rates and Assumptions

Before-tax return on savings ?

The nominal annual return your savings or investment earns before any taxes or inflation are taken out.

Table of Historic Rates of Return. Inflation 2.9%, U.S. Treasury Bills 3.3%, Long-term Government Bonds 5.0%, U.S. Large-Company Stocks 10.4%, and U.S. Small-Company Stocks 11.8%. Past performance is no guarantee of future results. Source: Ibbotson SBBI 1926-2024

Federal marginal tax bracket ?

The federal tax rate applied to the last dollar of investment income you earn.

Table of Federal Income Brackets and Rates. Tax Rate For Single Filers For Married Individuals Filing Joint Returns For Heads of Households 10% $0 to $11,925 $0 to $23,850 $0 to $17,000 12% $11,925 to $48,475 $23,850 to $96,950 $17,000 to $64,850 22% $48,475 to $103,350 $96,950 to $206,700 $64,850 to $103,350 24% $103,350 to $197,300 $206,700 to $394,600 $103,350 to $197,300 32% $197,300 to $250,525 $394,600 to $501,050 $197,300 to $250,500 35% $250,525 to $626,350 $501,050 to $751,600 $250,500 to $626,350 37% $626,350 or more $751,600 or more $626,350 or more.

Assumed inflation rate ?

The rate at which prices are expected to rise, used to translate your dollar return into purchasing power.

10 Year Historic Inflation Rate. 10-year U.S. inflation average 2.9% 2015 0.1%, 2016 1.3%, 2017 2.1%, 2018 2.4%, 2019 1.8%, 2020 1.2%, 2021 4.7%, 2022 8.0%, 2023 4.1%, 2024 2.9% Source U.S. Department of Labor

Advanced options 2

State marginal tax bracket ?

Your state's marginal tax rate on investment income, if any.

Do you itemize deductions? ?

No Yes

Whether you itemize deductions, which can affect how state taxes reduce your effective federal tax burden.

Enter your values and select Calculate.

The real annualized return is the number worth paying attention to here: it is your before-tax return after both taxes and inflation have taken their share, expressed as a single yearly rate. The two 10-year values above it show the same story in dollars — one before any of that erosion, one after. Neither figure is a prediction; both assume the same rate holds steady for all 10 years, which real markets rarely do.

Three inputs move these results the most: your before-tax return, your federal tax bracket, and the assumed inflation rate. A higher return grows both figures, but a higher tax bracket or higher inflation widens the gap between them — sometimes by more than people expect. Try nudging each one to see which has the biggest effect on your own numbers.

This calculator does not account for changing tax law, state deduction rules beyond the simple itemize toggle, fees or expense ratios, or the fact that real returns vary year to year rather than compounding smoothly. It is a simplified model meant to make the effect of taxes and inflation visible, not a forecast of what you will actually end up with.

It is worth revisiting this whenever your tax bracket changes, when inflation expectations shift meaningfully, or once a year as a general check-in. Having even a rough sense of your after-tax, after-inflation return is more than most people ever calculate, and small adjustments to savings or tax strategy can compound into a meaningfully different outcome over time.

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.