Your after-tax real rate of return is calculated by, first, figuring your after-tax pre-inflation rate of return, which is calculated as nominal return × (1 - tax rate). That would be 0.12 × (1 ...

Real Rate Of Return Formula & How To Calculate. The real rate of return can be calculated by subtracting the current or expected rate of inflation from the nominal rate of return on an investment.

If the nominal rate is 20% and the applicable tax rate is 15%, the after-tax return is 17%. The calculation is 0.20 x (1 - 0.15) . You can then adjust the 17% rate for inflation using the real ...

Tips to Improve After-Tax Real Rate of Return. If you want to make the most out of your real rate of return, it’s important to pay attention to the factors that affect it. Here are some simple tips on ...

Take a simple example. Say you start with $100,000 and earn a 5% after-tax nominal return over the course of a year. At the end of the year, your portfolio will be worth $105,000 after taxes.

Investors use rate of return to understand the earnings or losses on an investment in a specified period of time. Learn more about how it’s calculated.

For example, assume an individual achieves a 4.25% after-tax rate of return for stock ABC and is subject to a capital gains tax of 15%. The pretax rate of return is therefore 5%, or 4.25% / (1 - 15%).

If we subtract the inflation rate from the after-tax yield, we get a real after-tax yield of 0.44%. In other words, a 5.3% yield looks enticing, but after taxes and inflation, we’re not really ...

Subtract 1 and turn the result into a percentage, and that means that your real after-tax return was 5.77%. The key for investors is that if your real return is positive, then you're staying ahead ...

Take a simple example. Say you start with $100,000 and earn a 5% after-tax nominal return over the course of a year. At the end of the year, your portfolio will be worth $105,000 after taxes.