Frequently Asked Questions
Real return is your investment return after subtracting inflation. It shows how much your purchasing power actually grew, not just your account balance.
If your portfolio grows slower than inflation, your balance rises but buys less in real terms. In that case, your real CAGR is negative.
Many investors use long-run CPI averages (around 2% to 3%), but you can stress test with multiple scenarios to reflect uncertainty.
No. It isolates inflation adjustment. For net real returns, reduce ending value for taxes, expense ratios, and transaction costs before calculating.
Yes. Real returns are essential for retirement because spending happens in future dollars. Real CAGR helps estimate sustainable purchasing power.