Investment returns and planning

Use a real return when your spending target is in today's dollars. A common long-horizon planning range for a diversified stock-and-bond mix is a few percent above inflation, not the best recent decade. The number belongs in the assumptions, where you can lower it.

Arc · Published September 18, 2026 · Updated September 18, 2026

Real versus nominal

A nominal return includes inflation. A real return is what is left after inflation. If you type 7% into a calculator and also inflate your spending, you will double-count. Arc’s public calculators default to a real return and keep spending in today’s dollars.

Rough real return ≈ nominal return − inflation

What we will not say

We will not say a portfolio will return a specific number. Historically, broad stock markets have outpaced inflation over long periods, with long stretches that did not. A plan that only works at the optimistic rate is a wish.

Common questions

What default does Arc use on the public calculators?

Most growth tools default to 5% real, meaning after inflation. That is a round planning assumption so the examples stay readable. It is labeled on the page. It is not a forecast.