Inflation & purchasing power
RetirementFireLotse consistently calculates in today's purchasing power. All amounts – your FIRE target capital, your budget, your pension – correspond to what these sums are worth today.
This works because the 4% rule (Trinity Study) is inflation-adjusted from the outset: it assumes that you increase your withdrawal by inflation every year – and the portfolio still lasts 30+ years.
All projections (FIRE age, Coast FIRE, milestones) use the real return – your portfolio return minus expected inflation. That way the portfolio in the chart only grows by the genuine gain in purchasing power.
Why no "future euros"?If your FIRE target is €600,000, that means €600,000 in today's purchasing power. In 25 years that might be €990,000 nominally – but your expenses would have risen just as much by then. The figure "€600,000" stays tangible and comparable.
Real vs. nominal return:With a 6% nominal return and 2% inflation, the real return is approx. 4%. That is the return by which your portfolio actually grows in purchasing power. FireLotse uses this real value for projections.