Inflation Calculator
Calculate how inflation affects purchasing power. See what a dollar amount from any year is worth today, or what today's money will buy in the future.
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Understanding Inflation
Inflation measures how much prices increase over time, reducing the purchasing power of money. If inflation averages 3% per year, something that costs $100 today will cost $134 in 10 years and $181 in 20 years.
Historical US Inflation
US inflation has averaged about 3.2% annually since 1926. Recent years saw higher inflation (7-9% in 2022) before moderating. The Federal Reserve targets 2% annual inflation as ideal for economic growth.
Why Inflation Matters for Financial Planning
Inflation means your retirement savings need to grow faster than inflation to maintain purchasing power. A 7% investment return with 3% inflation gives you only 4% real growth. This is why keeping large amounts in low-yield savings accounts can actually lose you money in real terms.