Investment Return Required to Reach a Goal

Most people think about retirement or financial targets in today's dollars — real purchasing power, not a future nominal account balance. This calculator works backward: you enter a target in today's dollars, your starting balance, contributions (indexed to inflation), time horizon, and inflation assumption — and it shows the annual return required to get there.

Contributions are entered in today's dollars and increase with assumed inflation over time, so your real saving effort stays constant as income and prices rise. The required return is shown in both nominal (pre-inflation) and real (after-inflation) terms.

Inputs

Real buying power at the end of the horizon — not a future nominal balance.

Use a negative amount to model recurring withdrawals. Nominal contributions rise with inflation; real effort stays constant.

How contributions are treated

You enter contributions in today's dollars. Over the horizon, nominal contributions increase at the assumed inflation rate — the same assumption as rising income and prices. In the schedule (real dollars), each period's contribution stays constant; in nominal terms it grows.

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Results

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Required annual return (nominal)
Pre-inflation rate that closes the gap
—
Required annual return (real)
After inflation — purchasing power growth
—
Target in nominal dollars
Equivalent future account balance at assumed inflation
$—

Path at required return (today's dollars)

Starting amount
$—
Total contributions (real)
$—
Investment growth (real)
$—

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Accumulation schedule at required return

Year-by-year path in real (today's) dollars if the required return is achieved. Contributions shown are real amounts per period; nominal contributions rise with inflation.

Year Contributions Growth Ending balance
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Assumptions used in this calculator

The target is stated in today's dollars (real purchasing power). Starting balance and contributions are also in today's dollars. Nominal contributions increase at the assumed inflation rate; real contributions stay constant.

The solver finds the nominal annual return that produces the target real balance. The terminal horizon is the exact entered number of years Y. Contribution frequency only sets contribution dates inside that horizon; growth uses continuous annual compounding over exact time intervals, (1 + r)Δt. No taxes, fees, or account rules are modeled.

Historical S&P 500 context (shown when the required real return exceeds 7%) uses total return with dividends over calendar years 1975–2024: approximately 12.1% annualized nominal and 8.2% annualized after inflation. Past performance is not a forecast.

Frequently Asked Questions

Why is the target in today's dollars?

Most people planning a retirement number or portfolio goal think in purchasing power — what the money will buy — not in inflated future nominal dollars. This calculator takes a real target and solves for the return required to reach it after inflation.

Why do contributions increase with inflation?

If wages and prices rise over a long horizon, the amount you can set aside often rises too — not always one-for-one, but a constant real contribution is a reasonable baseline. You enter today's dollar amount; the model inflates nominal contributions over time while keeping real effort constant.

What's the difference between the required nominal and real return?

The nominal return is the pre-inflation rate the portfolio must earn. The real return is what remains after inflation: (1 + nominal) ÷ (1 + inflation) − 1. Both are shown so you can compare the result to historical market data or planning assumptions.

How does this relate to the inflation-adjusted investment calculator?

The Inflation-Adjusted Investment Calculator goes forward: given a return, it projects ending balances. This calculator inverts that: given a target, it finds the required return. Both use the same shared simulation engine and assumptions.