Inflation Calculator
Estimate what today’s money will cost in the future, or what it’s really worth after years of rising prices.
Understanding the Inflation Calculator
Inflation is the rate at which prices for goods and services rise over time, which means the same amount of money buys a little less each year. This calculator runs that idea forward: it takes an amount today and projects what an equivalent purchase would cost after a chosen number of years at a steady inflation rate.
It also runs the comparison in reverse, showing how much purchasing power a fixed amount loses over the same period — useful for understanding why cash sitting idle quietly shrinks in real terms even though the number on the balance never changes.
Inflation isn’t perfectly steady in practice; it varies by year and by category of spending. Use a long-run historical average (commonly cited near 2–3% for broad consumer prices in stable periods) as a starting point, and adjust the rate to stress-test higher or lower scenarios.
See it in practice
Example 1 — Cost of a $1,000 purchase in 20 years
Example 2 — Higher inflation, shorter horizon
Common questions
For long-run US planning, 2–3% is a common baseline reflecting historical averages, but recent years have seen higher spikes. Try a range — 2%, 3%, and 5% — to see how sensitive your numbers are.
The number stays the same, but what it can buy shrinks as prices rise. That’s the gap between nominal value (the number) and real value (what it’s actually worth in today’s purchasing power).
Compound interest grows a balance forward; this calculator shrinks purchasing power forward. Compare the two rates to see whether your savings are actually gaining ground after inflation, not just in nominal dollars.
No — housing, healthcare, and education have often risen faster than the broad average, while some goods have gotten cheaper. This tool models a single blended rate, so treat it as a rough guide.
The Federal Reserve targets an average annual inflation rate of around 2%, measured using the Personal Consumption Expenditures price index. A rate near that target is generally considered healthy for the broader economy.
The Bureau of Labor Statistics tracks the prices of a fixed basket of goods and services each month, then compares that total cost to a base period to calculate the percentage change, which becomes the widely reported inflation figure.
Inflation measures how much prices rise across an economy over time. Cost of living reflects the actual expenses of maintaining a standard of living in a specific location, which is influenced by, but not identical to, inflation.
Yes. If a savings account’s interest rate is lower than inflation, the money loses purchasing power even as the balance grows, since prices rise faster than the interest being earned.
Headline inflation includes every category, including volatile food and energy prices. Core inflation strips those out, giving a clearer read on underlying, longer-term price pressure in the economy.
At a steady 3% annual inflation rate, $100 today would have the purchasing power of roughly $55 in 20 years. The exact figure depends on the actual inflation rate over that period, which varies year to year.
Prices are generally sticky downward because wages, contracts, and business costs rarely fall in tandem with any single factor. A return to lower prices, called deflation, is actually considered economically harmful and is deliberately avoided by policymakers.
Common approaches include investing in assets that have historically outpaced inflation over time, like stocks, keeping savings in accounts with competitive interest rates, and avoiding letting large sums sit in low-yield accounts for extended periods.