Inflation-Protected Income Calculator
Find the portfolio needed to fund spending that keeps pace with inflation, so your purchasing power holds for the whole retirement.
How it works
Capital = income × [1 − (1 + g)^(−t)] ÷ g, where g is the real return (return above inflation)
Funding income that keeps up with inflation is a present-value problem solved with the real return — your nominal return minus inflation. Discounting an inflation-indexed income stream at the real rate gives the lump sum needed to sustain constant purchasing power for the whole period. Because inflation quietly doubles prices over a working lifetime, planning in real terms is the only honest way to size a retirement portfolio.
Worked example
To fund $50,000 a year for 30 years with a 2% real return, the capital needed is 50,000 × [1 − 1.02^−30] ÷ 0.02 ≈ $1,119,000. The starting withdrawal rate is about 4.5%, and the final year's spending has grown to roughly $118,000 in nominal dollars at 3% inflation.
Frequently asked questions
Why use a real return instead of a nominal one?
Because the goal is constant purchasing power. Discounting inflation-indexed income at the real return automatically handles the rising nominal dollars, so you do not have to inflate every future payment by hand.
What is a reasonable real return?
A balanced retirement portfolio has historically delivered roughly 2-4% above inflation after fees. Conservative planning often uses 1-2% to build in a margin of safety.
How does this relate to the 4% rule?
The 4% rule is a rough shortcut for a ~30-year horizon; this calculator derives the exact capital for your specific horizon and real return, which can give a higher or lower safe rate.
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Educational estimate using simplified assumptions — real returns, taxes and fees vary. Not financial advice.