Inflation Calculator
See how inflation erodes purchasing power and what your money will be worth in the future.
US CPI average: ~3–4% (2020s), ~2% (2010s)
Today's Value of $10,000
$5,537
in 20 years (real purchasing power)
Future Cost of Today's $10,000
$18,061
needed to match today's buying power
Purchasing Power Lost
$4,463
% Loss
44.6%
To keep up with inflation, you'd need investments returning more than 3% annually. At 3% inflation, prices roughly double every 24.0 years (Rule of 72).
Formula
Calculates how inflation erodes purchasing power over time using the Consumer Price Index (CPI).
Future Cost = Present Cost × (1 + Inflation Rate)^Years
Worked Example
A sandwich costs $10 today. At 3% inflation over 15 years:
- Today cost: $10
- Inflation rate: 3%/year
- Cost in 15 years: $15.58
- Increase: 55.8%
Common Questions
What's average inflation?
US long-term average is ~3%/year. 2022 saw 8%+ (peaking at 9.1%); expect to revert to 2–3%. Use 3% for conservative retirement planning.
How does inflation affect retirement?
$50k/year needed today becomes $105k/year in 25 years at 3% inflation. Plan for a higher retirement nest egg to account for this.
Can I outpace inflation?
Yes. Stocks historically return 10% (vs. 3% inflation) = 7% real return. Bonds (~5%) barely beat inflation. Investments are how you build wealth.
Key Takeaways
- Inflation erodes cash savings—$10k under a mattress loses 45% buying power in 20 years at 3% inflation.
- Invest your long-term savings (3+ years); stocks historically beat inflation, cash doesn't.
- In retirement planning, don't forget to account for inflation on your spending needs.