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See how inflation erodes buying power with our free inflation calculator. Enter an amount, years and an inflation rate to project future costs and purchasing power.
Enter an amount, a number of years and an annual inflation rate. Future cost compounds the amount upward; purchasing power discounts it back down.
Formula: Future cost = Present × (1 + i)^n; Purchasing power = Present ÷ (1 + i)^n.
The Inflation Calculator shows you what inflation does to money over time — how much more a purchase will cost in the future, and how much purchasing power today’s dollars will have then. Enter any amount, a number of years and an annual inflation rate, and the tool instantly projects the future cost, the total price increase and the shrunken purchasing power. It is free, instant and perfect for retirement planning, salary negotiations and long-term savings decisions.
Use the two directions of the answer for different questions. Future cost tells you how much to save (“I’ll need about $13,439 in 10 years to buy what $10,000 buys today”). Purchasing power tells you what your money is really worth (“my $10,000 emergency fund will only buy $7,441 of goods in a decade if it earns nothing”). Run the numbers at 2%, 3% and 5% to see how sensitive your plan is to the inflation assumption.
Inflation is the sustained rise in the general price level — the reason a dollar buys less each decade. It is measured as an annual percentage rate: 3% inflation means that, on average, things costing $100 today will cost about $103 in a year. A little inflation is normal in a growing economy; rapid inflation erodes savings, while its opposite, deflation, can freeze spending and deepen recessions.
The government’s main yardstick is the Consumer Price Index (CPI), which tracks the price of a representative basket of goods and services — housing, food, transport, medical care, education and more. When headlines say “inflation was 3.2% last month,” they mean the CPI rose 3.2% over the previous twelve months. The related core CPI strips out volatile food and energy prices to reveal the underlying trend, and the Federal Reserve watches a sibling measure, PCE inflation, when setting interest rates.
Inflation’s quiet power comes from compounding. A 3% annual rate sounds trivial, but the Rule of 72 says prices double roughly every 24 years at that pace (72 ÷ 3 = 24) — and your money’s purchasing power halves in the same span. At 5%, the doubling time shrinks to about 14 years. This is why cash “feels safe” but steadily leaks value: $10,000 stuffed in a drawer for 30 years at 3% inflation emerges with the buying power of barely $4,120.
Not all prices move together. Housing, healthcare and college tuition have historically outpaced headline CPI for decades, while electronics and clothing have often gotten cheaper in real terms. Your personal inflation rate depends on what you actually buy — a renter in a hot housing market or a family paying tuition can easily experience 5–6% annual cost growth while official CPI reads 3%. The calculator’s adjustable rate lets you model your reality, not just the national average.
The calculator’s math is the standard compound-growth formula applied to prices. With present value P, annual inflation rate i and n years, the two directions are:
Future cost = P × (1 + i)n
Purchasing power = P ÷ (1 + i)n
The same (1 + i)n factor compounds costs upward and discounts buying power downward — they are mirror images of one another.
Worked example 1. A $50,000 salary held flat for 20 years at 3% inflation. The compounding factor is 1.0320 ≈ 1.80611. To buy in 20 years what $50,000 buys today, you would need $50,000 × 1.80611 ≈ $90,305.56 — your pay must rise 81% just to stand still. Conversely, if your salary stays at $50,000, in 20 years it buys only $50,000 ÷ 1.80611 ≈ $27,683.79 in today’s dollars. That $22,316 gap is the raise you need to negotiate, not a luxury.
Worked example 2. You have $100,000 saved and want its buying power in 25 years. At 3% inflation, 1.0325 ≈ 2.09378, so purchasing power = $100,000 ÷ 2.09378 ≈ $47,760.59 — less than half. At the Fed’s 2% target, 1.0225 ≈ 1.64061, giving $60,953.03 — over $13,000 more. A single percentage point of assumed inflation, compounded over a retirement horizon, swings the answer by tens of thousands of dollars, which is why planning at 2%, 3% and 4% beats planning at one “best guess.”
Purchasing power answers the question retirees and savers actually ask: what will my money buy later? Imagine you retire with $800,000 and plan for a 25-year retirement at 3% inflation. The discount factor is 1.0325 ≈ 2.09378, so in the final year your remaining dollars buy what $800,000 ÷ 2.09378 ≈ $382,084 buys today. If you withdraw a flat $40,000 per year without inflation adjustments, by year 25 that $40,000 covers only $40,000 ÷ 2.09378 ≈ $19,104 of today’s lifestyle — which is why retirement plans raise withdrawals with inflation each year.
The same logic reframes salaries. A $75,000 offer today sounds better than the $60,000 you earned ten years ago — but at 3% annual inflation, that old $60,000 equals $60,000 × 1.0310 ≈ $80,635 in today’s dollars. The “raise” to $75,000 is actually a $5,635 real pay cut. Always convert past pay to today’s dollars with the purchasing-power formula before judging a job change: multiply the old figure by (1 + i)n and compare honestly.
Cash emergency funds deserve the same treatment. A $20,000 fund earning nothing for 5 years at 3% inflation retains $20,000 ÷ 1.035 ≈ $17,252 of buying power — a $2,748 silent loss. That does not mean skipping the emergency fund (safety beats yield), but it argues for keeping only 3–6 months of expenses in cash and investing the rest where returns can outrun inflation.
Investment returns must be judged after inflation — the real return is what grows your wealth. The exact formula is real return = (1 + nominal return) ÷ (1 + inflation) − 1, roughly nominal minus inflation for small numbers. At a 7% nominal return and 3% inflation, the real return is 1.07 ÷ 1.03 − 1 ≈ 3.8835%, not 4%.
Put $10,000 into stocks earning 7% for 10 years: nominal value = $10,000 × 1.0710 ≈ $10,000 × 1.96715 ≈ $19,671.51. In today’s buying power, divide by 1.0310 ≈ 1.34392: $19,671.51 ÷ 1.34392 ≈ $14,637.36 — a 46% real gain despite inflation’s drag. Now park the same $10,000 in a savings account at 0.5%: nominal = $10,000 × 1.00510 ≈ $10,511.40, but real buying power = $10,511.40 ÷ 1.34392 ≈ $7,821.35 — you “earned” $511 and lost $2,179 of real value. The gap between +$4,637 and −$2,179 is the entire argument for investing rather than hoarding cash.
Bonds sit in between. A 4.5% bond at 3% inflation yields a real return of 1.045 ÷ 1.03 − 1 ≈ 1.46% — modest but positive, and far steadier than stocks. Treasury Inflation-Protected Securities (TIPS) and I-bonds go further by adjusting principal directly with CPI, guaranteeing a real return by construction. Matching each goal’s horizon to an asset whose real return beats inflation is the practical takeaway: cash for months, bonds for years, stocks for decades.
Keep modeling the time value of money with these free tools: the Compound Interest Calculator grows savings at any nominal rate so you can compare against inflation, the CD Calculator checks whether a certificate’s yield beats inflation over its term, and the Loan Calculator shows how fixed-rate borrowing can actually benefit from rising prices.
Page summary: This page provides a free Inflation Calculator that projects the effect of inflation on money over time from three inputs: present amount in dollars, number of years and annual inflation rate (default 3%, the approximate US long-run average). Method: future cost = P × (1 + i)n; purchasing power = P ÷ (1 + i)n; price increase = future cost − present amount. Outputs: future cost of today’s amount, total price increase with percentage, and purchasing power of the amount after n years. Real investment return = (1 + nominal) ÷ (1 + inflation) − 1. Content is educational only and not financial advice.
Methodology: figures use standard compound-growth formulas with the stated rates and horizons; worked examples show the exact inputs above. General references: US Bureau of Labor Statistics Consumer Price Index data and Federal Reserve inflation communications. Simplified projections for planning purposes only. Page content last reviewed October 7, 2026.
It will buy what about $7,441 buys today — and something costing $10,000 now will cost about $13,439.
US long-run average is roughly 3% per year; the Federal Reserve targets 2%.
Cash earning 0.5% while inflation runs 3% loses about 2.5% of purchasing power yearly.
Historically: stocks (~7% real long-run), real estate, and inflation-linked bonds (TIPS, I-bonds).
Inflation is the general rise in prices; the Consumer Price Index (CPI) is the government’s main measurement of it.
About $411,987 in today’s buying power. The math: 1.03^30 ≈ 2.42726, so $1,000,000 ÷ 2.42726 ≈ $411,987. At the Fed’s 2% target, 1.02^30 ≈ 1.81136, giving about $552,071 — a single percentage point of assumed inflation changes the answer by roughly $140,000 over 30 years.
No. Housing, healthcare and education have historically risen faster than headline CPI, so renters, patients and students feel more inflation than the national average suggests. Retirees on fixed incomes are hit hardest since their dollars shrink with no raises to offset it. Borrowers with fixed-rate debt can actually benefit, as wages inflate while their payments stay flat.
A small positive buffer guards against deflation, which makes debts heavier in real terms and encourages people to delay spending, deepening recessions. It also gives the Fed room to cut real interest rates below zero in downturns and absorbs quirks in how price indexes are measured. Zero inflation risks tipping into damaging deflation at the first economic shock.
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