Your real return is what an investment or savings account earns once rising prices are taken out: the growth in what your money can buy, rather than in the number on the statement. A 5% return in a year when prices also rise 5% leaves you exactly where you started.
The exact relation, named after the economist Irving Fisher, is real return = (1 + nominal return) ÷ (1 + inflation) − 1. A 7% return with 3% inflation gives 1.07 ÷ 1.03 − 1 = 3.88%, not 4%. The shortcut of subtracting one from the other, which the European Central Bank uses in its own explainer, is close at low rates and drifts as they rise: at a 20% return and 15% inflation it says 5%, where the exact figure is 4.35%. The ECB's example also shows the sign can flip. A saver earning 2.5% while prices rise 3% has a real return of about minus 0.5%, and ends the year able to buy less than at the start.
Over long periods the gap compounds. £10,000 growing at 7% for 30 years becomes £76,123 on paper; at the real 3.88% it is worth £31,361 in today's money. Nothing has been lost between the two figures: the difference is what prices did in the meantime, which is why a long projection in nominal terms can look far more comfortable than it is.
Tax pushes the real figure lower again where interest or gains are taxed each year, because tax falls on the whole nominal return, including the part that only keeps pace with prices.
The retirement calculator takes your return as nominal, applies the exact Fisher form, and shows each balance both as a statement would and in today's money. The inflation calculator gives the historical rates for each country to test your inflation assumption against.