Inflation Calculator
A dollar today won’t buy a dollar’s worth in twenty years. This calculator shows how inflation quietly erodes purchasing power — both what your money will be worthin the future and what today’s prices will grow to.
How this calculator works
Inflation compounds just like interest, only working against you. Over n years at an annual inflation rate i, the cost of the same basket of goods grows by a factor of:
(1 + i)ⁿ
So a price today becomes:
future cost = amount · (1 + i)ⁿ
and the buying power of money you hold (without investing it) shrinks to:
future buying power = amount ÷ (1 + i)ⁿ
Why this matters for saving
Cash sitting idle loses value to inflation every year. To preserve or grow buying power, savings generally need to earn at least the inflation rate — which is why long-term money is often invested rather than left in cash.
Frequently asked questions
- What inflation rate should I use?
- Long-run U.S. inflation has averaged around 3% per year, though individual years vary widely. Use 2–3% for a typical estimate, or a higher figure if you want to stress-test a high-inflation scenario.
- What's the difference between the two results?
- 'Future buying power' is what a fixed amount of cash will be worth in real terms later. 'Future cost' is how much you'll need to buy something that costs that amount today. They're two sides of the same coin.
- How do I beat inflation?
- By earning a return at least equal to the inflation rate. A savings account paying less than inflation still loses real value. The compound interest and retirement calculators on this site can show how investing helps your money outpace rising prices.