Inflation Calculator
See how inflation affects your money's purchasing power
The dollar amount you want to analyze
Historical average (1926-2023): ~3.25%
Inflation Results
Original Amount (2023)
$0
Equivalent Amount (2043)
$0
Cumulative Inflation
0%
Annual Inflation Rate: 3.25%
How to Use This Calculator
This calculator shows how inflation erodes purchasing power over time. It helps you understand how much more you'll need in the future to maintain the same standard of living.
Step-by-Step Guide:
- Enter Amount - The dollar amount you want to analyze
- Set Starting Year - Base year for your amount (use current year for today's dollars)
- Set Ending Year - Future year you want to compare to
- Optional: Enter a custom inflation rate (leave blank for historical average)
- Click Calculate - See how inflation affects your money's value
Tip: For retirement planning, use 2.5-3.5% for general inflation, but 5-6% for healthcare costs which typically outpace general inflation.
Inflation Calculator FAQs
What is inflation?
Inflation is the gradual increase in prices and fall in purchasing power of money over time. $100 today buys less than $100 did 20 years ago.
What's the historical average inflation rate?
Since 1926, U.S. inflation has averaged about 3.25% annually. However, it varies significantly by decade - from deflation in the 1930s to over 13% in 1979.
How should I use this for retirement planning?
Calculate your current expenses in future dollars. If you spend $50,000 today, you might need $90,000 in 20 years to maintain the same lifestyle at 3% inflation.
Why do some items inflate faster than others?
Healthcare and education costs typically rise faster than general inflation (5-6%), while technology often gets cheaper. The CPI basket weights these differently.
How can I protect my money from inflation?
Consider: 1) Stocks (historically outpace inflation), 2) TIPS (Treasury Inflation-Protected Securities), 3) Real estate, and 4) I-Bonds (inflation-linked savings bonds).
Is deflation possible?
Yes, though rare in modern economies. Deflation (falling prices) occurred during the Great Depression and briefly in 2009. It can be harmful as people delay purchases expecting lower prices.
