Savings, Taxes, and Inflation Calculator
Use this calculator to determine how much your savings will be worth with these two important variables in mind.
How the savings, taxes, and inflation calculator works
It first reduces your return by the tax you owe on interest, then by inflation, to find your real rate of growth. Your savings are projected at both the headline rate and this real rate, exposing the gap between what your balance says and what it can actually buy.
Worked example: with starting amount of $25,000, monthly contribution of $300 and nominal annual return of 6.00%, the savings, taxes and inflation calculator shows real value in 20 years of $119,699.
- Nominal balance
- $221,367
- After-tax return
- 4.68%
- Real return
- 1.63%
- Real (today’s) value
- $119,699
The formula
After-tax rate = return × (1 − tax). Real rate = (1 + after-tax rate) ÷ (1 + inflation) − 1. Savings are grown at both rates.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the savings, taxes, and inflation calculator
Why is my real return lower than the stated rate?
Taxes take a slice of your interest, and inflation erodes the buying power of what is left. Together they can turn a healthy nominal return into a barely-positive real one.
How do I protect savings from inflation?
Earn a return above inflation, use tax-advantaged accounts to cut the tax drag, and avoid leaving large sums in accounts paying less than the inflation rate.
Does this apply to all savings?
The tax effect applies to taxable interest; tax-advantaged accounts avoid it. Inflation affects everything. Set the tax rate to zero to model a tax-free account.
Is the Savings, Taxes, and Inflation Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.