Inflation Calculator
See how inflation silently erodes your money over time. Find out how much you'll need in the future to maintain today's buying power.
Free calculator with yearly breakdown and visual charts
Enter Your Values
Your Results
Today's Value
$100,000
Future Buying Power
$74,409
Value Lost
$25,591
You'll Need
$134,392
At 3% inflation, your $100,000 will only buy $74,409 worth of goods in 10 years — a 25.6% loss in purchasing power. You'll need $134,392 to match today's buying power.
Purchasing Power Over Time
Show Yearly Breakdown
| Year | Buying Power | Value Lost | % Remaining |
|---|---|---|---|
| 1 | $97,087 | $2,913 | 97.1% |
| 2 | $94,260 | $5,740 | 94.3% |
| 3 | $91,514 | $8,486 | 91.5% |
| 4 | $88,849 | $11,151 | 88.8% |
| 5 | $86,261 | $13,739 | 86.3% |
| 6 | $83,748 | $16,252 | 83.7% |
| 7 | $81,309 | $18,691 | 81.3% |
| 8 | $78,941 | $21,059 | 78.9% |
| 9 | $76,642 | $23,358 | 76.6% |
| 10 | $74,409 | $25,591 | 74.4% |
Understanding the Impact of Inflation
Inflation is often called the "silent tax" because it gradually reduces the value of your money without you noticing. A dollar today buys less than a dollar did 10 years ago, and will buy even less 10 years from now.
The Rule of 72
A quick way to estimate how long it takes for inflation to cut your purchasing power in half: divide 72 by the inflation rate. At 3% inflation, your money loses half its value in about 24 years. At 7%, it takes only about 10 years.
Real vs. Nominal Returns
When evaluating investments, always consider real returns (after inflation) rather than nominal returns. An investment earning 7% with 3% inflation has a real return of approximately 4%. This is why keeping large sums in a 0.5% savings account during 3% inflation means you're losing about 2.5% per year in real purchasing power.
How to Beat Inflation
- Stocks: Historically return 7-10% annually, well above inflation
- I Bonds: US government bonds that adjust for inflation automatically
- TIPS: Treasury Inflation-Protected Securities indexed to CPI
- Real estate: Property values and rents tend to rise with inflation
- High-yield savings: At minimum, use accounts paying 4-5% APY
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Frequently Asked Questions
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, causing purchasing power to fall. If inflation is 3%, something that costs $100 today will cost $103 next year.
What is a good inflation rate?
Most central banks target around 2% annual inflation. The US Federal Reserve targets 2% as measured by the Personal Consumption Expenditures (PCE) price index. Higher rates erode savings faster.
How does inflation affect my savings?
If your savings earn less interest than the inflation rate, you're losing purchasing power. For example, if inflation is 3% and your savings account pays 1%, you're effectively losing 2% per year in real terms.
How can I protect my money from inflation?
Common inflation hedges include investing in stocks (which historically outpace inflation), Treasury Inflation-Protected Securities (TIPS), real estate, I Bonds, and commodities. Keeping too much cash in low-interest accounts is one of the worst strategies during high inflation.
What was the average US inflation rate historically?
The average US inflation rate has been approximately 3.3% per year since 1914. However, it varies significantly — from deflation during the Great Depression to over 13% in 1980, and around 8-9% in 2022.