Inflation Calculator
What a sum of money will be worth after years of inflation.
Input sheet
DIY at your own risk. Calcora's calculators and guides are general estimates and information only — not professional, engineering, legal, or safety advice. Always verify local building codes and permit requirements, and hire a licensed pro for electrical, gas, plumbing, structural, or any work you're not fully comfortable doing yourself.
Money loses purchasing power over time. This shows what a sum will actually buy after years of inflation — and how many dollars you would need later to match what you can buy today.
How it works
Future buying power of today's dollars is amount ÷ (1+rate)^years. The cost to buy the same goods later is amount × (1+rate)^years.
There are two sides to inflation. Looking forward, today's dollars buy less, so their real value shrinks by dividing by (1 + rate) each year. Looking at cost, the same basket of goods gets pricier, multiplying by (1 + rate) each year. The calculator reports both.
Even a modest rate compounds. At 3% a year, prices roughly double over about 24 years — which is why a long retirement or savings horizon has to plan for inflation, not just nominal returns.
Future buying power = amount ÷ (1 + rate) raised to the number of years. Cost to buy the same goods later = amount × (1 + rate) raised to the number of years. Value lost = amount minus future buying power.
Worked examples
$1,000 today at 3% annual inflation over 10 years. → $744.09 of today's buying power; $1,343.92 needed to match; $255.91 of value lost.
Dividing $1,000 by 1.03 ten times gives $744.09 of real value left. To buy what $1,000 buys today, you would need $1,343.92 in ten years — the same $1,000 grown by inflation.
Tips & gotchas
- When planning investments, compare your return to inflation. A 5% return during 3% inflation is only about 2% of real growth.
- For raises and salary negotiations, anything below the inflation rate is effectively a pay cut in purchasing power.
- Use a rate that fits your horizon. Long-run U.S. inflation has averaged near 3%, but specific decades have run much higher or lower.
- Cash sitting idle is the clearest victim of inflation — this is the case for holding emergency funds in high-yield accounts rather than under the mattress.
FAQ
What inflation rate should I use?
Long-run U.S. inflation has averaged roughly 3% per year, but use a figure that fits your time horizon.
What is the difference between nominal and real value?
Nominal is the face number of dollars; real value is what those dollars can actually buy. Inflation erodes real value even when the nominal number stays the same.
What inflation rate should I enter?
Around 3% reflects the long-run U.S. average, but you can use a recent CPI figure or a rate tailored to your spending. Higher rates erode value faster, so test a range.
Does this use official CPI data?
No — it applies a single rate you choose, compounded annually. It is a planning estimate, not a lookup of historical CPI for specific years.
How can I protect against inflation?
Holding assets that tend to grow with or faster than prices — diversified stocks, certain real assets, or inflation-protected securities — helps preserve real value better than cash.
Related calculators
Tip with Tax Calculator · Salary to Hourly Calculator · Simple Interest Calculator · Rule of 72 Calculator · Mortgage Calculator