Inflation Calculator
Future value = amount × (1 + inflation rate)^years
How Inflation Affects Purchasing Power
Inflation is the gradual increase in prices across an economy, which erodes the purchasing power of money over time. At 3% annual inflation, something costing $100 today will cost approximately $134.39 in 10 years (100 × 1.03^10). Conversely, $100 in future dollars buys what $74.41 buys today — your money buys less each year inflation persists.
The formula for future cost is: future value = present value × (1 + inflation rate)^years. For retirement planning, this means you need more dollars in the future to maintain the same lifestyle. A $50,000 annual budget today requires roughly $67,196 in 10 years at 3% inflation — and $90,306 in 20 years. Failing to account for inflation leads to significant underestimation of future needs.
Historical U.S. inflation has averaged roughly 3% over the long term, though it varies considerably. The 1970s saw double-digit inflation; the 2010s averaged under 2%. Recent years have experienced elevated inflation near 4–8%, reminding savers that cash losing 3–5% purchasing power annually is effectively a guaranteed loss even in "safe" savings accounts.
Inflation affects different expenses unevenly. Healthcare and college tuition have historically outpaced general inflation, while technology products often decrease in price. When planning long-term budgets, consider category-specific inflation rates rather than a single blanket figure for all expenses.
Use this calculator to understand how inflation impacts your savings goals, salary negotiations, and retirement planning. Enter a dollar amount, inflation rate, and time period to see the future equivalent cost or the present purchasing power of future dollars.
Examples
| Example | Result |
|---|---|
| $100 today, 3% inflation, 10 years | Future cost $134.39 |
| $1,000 today, 2.5% inflation, 20 years | Future cost $1,638.62 |
| $50,000 salary, 3% inflation, 5 years | Equivalent salary $57,964 |
| $500 today, 4% inflation, 15 years | Future cost $900.47 |
| $10,000 today, 3% inflation, 25 years | Future cost $20,937.73 |
| $2,000 today, 2% inflation, 30 years | Future cost $3,622.79 |
| $75,000 today, 3.5% inflation, 8 years | Future cost $98,760.68 |
Frequently asked questions
As prices rise, each dollar buys fewer goods. At 3% inflation, $100 today equals about $134 in 10 years — you need more money for the same purchases.
The U.S. long-term average is roughly 3%. The Federal Reserve targets 2%. Recent years have seen rates from 2% to over 8%.
Invest in assets that outpace inflation: stocks, real estate, TIPS (Treasury Inflation-Protected Securities), and I Bonds. Cash alone loses purchasing power.