NakedPuts2011

actual portfolio returned 82500...

which works out to 7.4% (82500/Investable Assets).
This is the nominal return.

subtracting the inflation from that -- gives you the real return provided by the portfolio to be 4.4% (or less if you did 1.074/1.03 - 1) and this is less than the REQUIRED real return of 4.5% (calculated as 50000/Investable Assets).

So the realized return is < than the required return.

82500 is the Nominal return... not the real return (because that is what the portfolio actually returned).

CP