Inflation Calculator
See exactly how inflation erodes the value of money. Compare today's purchasing power to the future, and find the real value of long-term savings.
Long-term US average is ~3%.
How to read your result
- Future cost
- What today's price tag will read in nominal future dollars — useful for budgeting big future purchases (college, cars, homes).
- Future buying power
- What today's dollars will actually buy after years of inflation — the number that matters for retirement and long-term savings.
- Total inflation %
- Cumulative price rise over the period. Above 50% means prices will roughly outpace any low-yield savings account.
- Purchasing power lost
- Real value destroyed for any money held in cash at 0% interest. Over 30+ years at 3%, more than half of cash's value disappears.
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Recommended next steps
How it works
- 1Enter an amount
Pick a dollar figure you want to compare across time — savings, salary, cost of an item.
- 2Set the time horizon
How many years into the future you want to project.
- 3Choose an inflation rate
3% is the long-term US average. Use higher rates for conservative planning.
- 4Read both numbers
Future cost (what today's price will become) and future buying power (what today's $ will buy later) — they're inverses.
Inflation is the silent tax on cash. A dollar in 1990 had the buying power of about $2.40 today — meaning anyone who held cash for 35 years lost more than half its real value. The same erosion is happening right now to anyone keeping large sums in low-yield accounts.
There are two ways to look at inflation. First: how much will today's prices be in the future? At 3% inflation, a $30,000 car today will cost about $54,000 in 20 years. Second: how much will today's dollars buy in the future? $30,000 today will buy only about $16,600 worth of stuff in 20 years.
This is why long-term savings need to outpace inflation. If your savings account pays 0.5% but inflation runs 3%, you're losing 2.5% of real purchasing power every year — guaranteed. A $100,000 nest egg becomes worth $61,000 (in today's dollars) after 20 years if it earns nothing.
Stocks have historically returned about 7% after inflation (10% nominal minus 3% inflation). That's the 'real return' — what actually buys more goods and services. Bonds typically deliver 1–2% real returns. Cash usually delivers negative real returns over long periods.
Use this calculator to plan retirement, evaluate whether a salary increase is real or just keeping up with inflation, and see how an emergency fund's purchasing power changes over time.
The future inflation formula is the same one used for compound interest: future cost = today's price × (1 + inflation rate)^years. So a 3% inflation rate over 20 years means prices rise by a factor of 1.03^20 ≈ 1.806 — almost an 81% cumulative increase even though no single year felt dramatic.
For real-world planning, decouple the two numbers this calculator produces. The 'future cost' figure is what shows up in nominal contracts (car prices, college tuition, house listings). The 'future buying power' figure is what matters when you're projecting whether savings or a pension will still cover the lifestyle you have today.
A useful gut-check: inflation roughly halves cash every 24 years at 3%, every 18 years at 4%, and every 12 years at 6% — the rule of 72 again, applied to inflation instead of growth. Anyone with a 30-year retirement horizon should expect their cost of living to roughly double during retirement.
Example scenarios
Equivalent to about $90k future dollars to maintain the same standard of living.
Buying power falls to about $412k by year 30 if invested at 0%.
Costs about $543k in 20 years just to keep up with inflation.
Buying power drops to ~$4,120 — a 59% real loss without spending a dollar.
Requires ~$125,600/year to maintain the same lifestyle. Retirement plans need to scale.
Same coffee costs ~$16.30 in 40 years. Compound inflation on small items adds up.
What affects your result?
The single biggest lever. Doubling the rate from 2% to 4% nearly doubles cumulative inflation over any horizon. Use the 100-year US average (~3%) for honest baselines, not the most recent year.
Inflation compounds. A 3% rate looks gentle year-by-year but cuts buying power in half every ~24 years. Retirement horizons of 30+ years are especially sensitive.
Cash loses to inflation. Bonds roughly match it. Stocks have historically beaten it by ~7%/yr. The decision of where to hold long-term wealth matters more than the inflation rate itself.
Healthcare, college tuition, and housing have historically inflated 1–4% faster than CPI. Retirement and education plans should layer in a higher rate for these categories.
Common mistakes to avoid
- Using last year's inflation rate for a 30-year projection — multi-decade plans should use the long-run average, not a single noisy data point.
- Comparing future nominal balances to today's costs — a '$1M retirement' projection 30 years from now buys only what ~$412k buys today at 3% inflation.
- Assuming a fixed-rate savings account 'protects' against inflation — most savings rates lag inflation over multi-year periods, locking in a real loss.
- Ignoring inflation on the income side — wages that grow with CPI offset much of the price increase. Plans for fixed-income retirees should be more conservative than plans for working savers.
- Confusing nominal and real investment returns — a 9% portfolio in a 3% inflation world is really 6% real, and that's the number that matters for buying power.
Common questions
What is inflation?
Inflation is the general rise in prices over time, which means each dollar buys less than before. The US has averaged about 3% annual inflation over the past century, though it varies widely year to year.
What inflation rate should I use?
For long-term planning, 2.5–3% is the historical US average. Use 3.5–4% for a conservative estimate, or match the rate to a specific period (the 1970s averaged 7.4%; 2010–2020 averaged 1.8%).
How does inflation affect my savings?
Cash sitting in a 0.5% savings account loses purchasing power every year inflation runs higher. To preserve real wealth, your money needs to grow at least as fast as inflation — which is why long-term savings usually go into investments, not just savings accounts.
What's the difference between nominal and real returns?
Nominal returns are what you see on a statement (e.g. 8% portfolio growth). Real returns subtract inflation (8% − 3% inflation = 5% real growth). Always think in real terms for long-term planning.
How much will $1 today be worth in 20 years?
At 3% inflation, $1 today has the buying power of about $0.55 in 20 years. Or flipped: you'd need $1.81 in 20 years to buy what $1 buys today.
How is future inflation calculated?
Future cost = present amount × (1 + inflation rate)^years. Future buying power = present amount ÷ (1 + inflation rate)^years. So $10,000 today at 3% inflation = $18,061 future cost / $5,537 future buying power after 20 years.
How much will $100,000 be worth in 30 years?
At 3% inflation, $100,000 today has the buying power of just $41,200 in 30 years — losing about 59% of its real value. Held in a 5% account it ends at $432,000 future dollars but only ~$178,000 of real buying power.
What's the inflation rate in 2026?
US CPI inflation in 2026 is running near the Federal Reserve's 2% long-term target after the post-2022 cycle. For multi-decade financial planning the 2.5–3% historical average is still the safer assumption than this year's print.
How do I calculate future value with inflation?
Use the same compound formula as interest but with the inflation rate as the 'rate': FV = PV × (1 + i)^n. To get inflation-adjusted (real) future value of a nominal investment, divide by (1 + i)^n at the end.
Does inflation affect retirement planning?
Critically. A retiree spending $60,000/year today will need ~$108,000/year in 20 years at 3% inflation just to maintain the same lifestyle. This is why retirement plans use inflation-adjusted withdrawal rules like the 4% rule.
Why does inflation hurt savers more than investors?
Savings accounts and bonds earn fixed nominal rates that often lose to inflation, locking in real losses. Stocks, real estate, and TIPS have historically grown faster than inflation, preserving (and growing) real wealth over decades.
How do I beat inflation?
Hold the bulk of long-term savings in real-return assets: diversified stock index funds (historical ~7% real return), real estate, TIPS (Treasury Inflation-Protected Securities), and series I bonds. Keep cash only for short-term needs and emergency funds.
What was the worst inflation period in US history?
The 1970s — CPI averaged 7.4% per year for the decade and peaked above 14% in 1980. Anyone holding cash through that decade lost roughly half their real wealth. Modern portfolios usually plan for a tail-risk scenario like this.