Interactive financial calculator
Inflation Calculator
Estimate how a constant annual inflation rate could change the purchasing power of an amount over time.
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- Inputs stay in your browser
Methodology & Assumptions
How this estimate is calculated
Formula: purchasing power = present amount ÷ (1 + inflation rate)^years. The rate is compounded annually and held constant for the full period.
Illustrative result: figures are rounded for display after calculations use full numeric precision. Actual results may differ.
Currency: dollar symbols are a display convention. Enter every monetary amount in one consistent currency; the calculator does not convert currencies or apply jurisdiction-specific tax rules.
What Inflation Does to Your Money
Inflation is the gradual erosion of purchasing power — the same dollar buys less each year as prices rise. At the US historical average of 3% annually, the effects compound to numbers most people find surprising.
| Years | $100,000 purchasing power (3% inflation) | Amount lost |
|---|---|---|
| 10 years | $74,400 | $25,600 |
| 20 years | $55,400 | $44,600 |
| 30 years | $41,200 | $58,800 |
| 40 years | $30,700 | $69,300 |
At the constant 3% assumption shown, $100,000 has about $41,200 of today's purchasing power after 30 years. Actual inflation varies, and cash may still serve short-term or emergency needs.
How to Use This Calculator
Enter any amount to see its future purchasing power, or the amount needed to maintain today's purchasing power at a given inflation rate. Adjust the inflation rate slider to model different scenarios — 2% for optimistic, 3% for historical average, 4-5% for cautious planning.
Investments That Beat Inflation
Stocks: Diversified equities have historically delivered positive long-term real returns, but they are volatile and do not track inflation reliably over every period.
Real estate: Property values and rents tend to rise with inflation. REITs provide liquid exposure without landlord responsibilities.
United States I Bonds and TIPS: These government securities are designed with inflation-linked components. Terms, taxes, liquidity, eligibility, and real outcomes differ, so check current Treasury information.
Cash: Loses 2-4% of real value annually at typical inflation rates. Appropriate only for emergency funds and short-term goals.
Related: Compound Interest Calculator — see how investing beats inflation over time.
Frequently Asked Questions
What inflation rate should I use for retirement planning?
3% is the standard assumption, reflecting the US long-run average. For conservative planning, use 3.5%. The 4% rule already accounts for inflation in withdrawals — your FIRE number uses today's dollars and the withdrawal mechanism handles future price increases automatically.
How did 2021-2023 inflation affect planning?
Rapid price changes showed why a plan should distinguish nominal amounts from purchasing power and test more than one inflation assumption. Asset-class results varied over the period and do not establish a guaranteed future hedge.
Does inflation help or hurt people with mortgages?
Inflation can reduce the real burden of a fixed nominal payment, especially if household income also rises. It can simultaneously increase other living costs, and variable-rate or refinanced debt behaves differently.
What is "real" vs. "nominal" return?
Nominal return is the percentage shown before adjusting for inflation. Real return measures the change in purchasing power; subtracting inflation is a useful approximation, while the precise relationship is (1 + nominal return) ÷ (1 + inflation) − 1.