Inflation quietly shrinks your money every year. See what today’s amount will cost in the future โ and what it will actually be worth.
Inflation Calculator
Based on steady average inflation. The long-run US average is roughly 2.5โ3% a year; the Fed targets 2%.
A projection, not a prediction โ real inflation varies year by year.
How inflation erodes money
Inflation compounds, exactly like interest in reverse. The two formulas are: Future cost = Amount ร (1 + rate)years and Future buying power = Amount รท (1 + rate)years. At 3% a year, prices double roughly every 24 years โ so cash sitting still loses about half its buying power in that time.
Example
$10,000 at 3% inflation for 20 years: you would need $18,061 in 20 years to buy what $10,000 buys today, while $10,000 kept as cash would buy only $5,537 worth of today’s goods.
Frequently asked questions
What inflation rate should I use?
For long-term US planning, 2โ3% is the common range. Use 2% for an optimistic case, 3% as a middle case, and 4โ5% to stress-test your plan.
Why does money in a savings account still lose value?
If your account pays 1% while inflation runs at 3%, your balance grows but your buying power falls about 2% a year. Your money must earn at least the inflation rate just to stand still.
What is the difference between this and a CPI calculator?
CPI calculators use the actual recorded price index between two past years. This calculator projects a future period using an average rate you choose, which is what you need for planning.