A larger balance can buy less: planning in real purchasing power
Separate nominal investment growth from what your future budget can actually buy.
The balance is only half the story
A growing account can still fail to keep pace with the cost of a future goal. Nominal return measures the change in francs; real return considers purchasing power. Fees and taxes further change the amount available. The Swiss National Bank explains why price stability matters, but a national inflation measure does not reproduce every household’s personal spending basket, especially when housing, health or education dominate.
Model the goal before the return
Write today’s cost and build alternative future cost assumptions. Use these as scenarios, not inflation forecasts. If the goal is a purchase abroad, include currency separately; domestic inflation alone cannot explain the future franc cost. Keep contribution increases visible as a separate lever. A higher monthly contribution can improve progress without assuming that markets will deliver a convenient return exactly when the goal comes due.
Hypothetical purchasing-power calculation
If a project costs CHF 100,000 today and its price hypothetically rises 2% each year, the cost after ten years is about CHF 121,899. That follows 100,000 × 1.02 to the power of ten. The 2% is illustrative, not the current Swiss inflation rate or an official forecast. Repeat the calculation with lower and higher assumptions, because one clean-looking number can hide substantial uncertainty.
Do not confuse policy with prediction
The SNB’s definition of price stability and its monetary-policy decisions are useful background, not a personal investment instruction. Reuters’ April 2026 reporting on the SNB illustrates how energy costs, growth and exchange-rate pressures can pull in different directions. The lesson for planning is to preserve several scenarios. It is not to turn one historical news report into a claim about today’s policy rate or tomorrow’s market return.
Choose the right comparison
Compare expected spending power after all costs rather than selecting the highest nominal illustration. Riskier assets may offer growth potential but can lose money, including over the period you need. Cash preserves short-term accessibility but has inflation exposure. Bonds introduce interest-rate and issuer risks. A sensible allocation must reflect both the deadline and the consequences of missing it; no asset category automatically solves purchasing-power risk.
A practical review routine
Update the actual price of the goal annually instead of only applying an assumed index. Review contributions, net costs and flexibility. For retirement, distinguish essential recurring spending from optional projects and include pension income separately. Bring these assumptions to a planning discussion so projections are presented in both nominal and real terms. Clearwise’s role is to make the assumptions understandable, not to promise a particular inflation-adjusted result.
Keep household inflation separate
A family planning overseas university fees should obtain actual fee schedules rather than using the Swiss consumer index for every cost. A retiree expecting substantial housing expenses should examine the specific housing plan. These examples do not predict future prices; they show why a personal budget can depart from the national average. Use official statistics as context and actual project quotations where possible, then preserve a range of outcomes rather than presenting one inflation assumption as a certainty about your future expenses.
Sources and further reading
Original Clearwise analysis. External reporting provides context; rules and contract terms must be verified with the competent authority or provider. Some press articles may require a subscription.
Apply this to your situation
Compare your actual documents and clarify what matters before making a commitment.
Request a free consultationGeneral guidance, not a binding quote or personalised legal, tax or investment advice. Examples are hypothetical and results are not guaranteed.
