Future Purchasing Power
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Purchasing Power Lost
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Equivalent Needed
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When Should You Use an Inflation Calculator?
Use this calculator to understand the long-term impact of inflation on your savings and goals:
- Retirement planning — see how much your savings will actually buy in 20 or 30 years.
- Setting savings goals — know how much extra you need to save to maintain purchasing power.
- Evaluating investments — compare your investment returns against inflation to see your real gains.
- Pricing future expenses — estimate what college, a home, or healthcare will cost in the future.
How It Works
1
Enter Your Amount
Type in the current dollar amount you want to project into the future.
2
Set Inflation & Years
Choose an inflation rate (3% is a common average) and the number of years to project.
3
See the Impact
View how much purchasing power you lose and how much more you would need to break even.
Frequently Asked Questions
Inflation is the rate at which the general level of prices for goods and services rises over time, reducing the purchasing power of money. If inflation is 3% per year, something that costs $100 today will cost $103 next year. Central banks aim to keep inflation at a low, stable rate, typically around 2%.
The long-term average US inflation rate is approximately 3% per year. However, it varies significantly: it was below 2% in the 2010s, spiked above 8% in 2022, and central banks typically target around 2% annually. For long-term planning, using 3% is a reasonable and slightly conservative assumption.
To beat inflation, your investments need to earn a return higher than the inflation rate. Historically, stocks have returned about 10% per year (7% after inflation), real estate 4-8%, and bonds 2-5%. Keeping cash in a savings account often loses purchasing power to inflation. Diversifying across asset classes is the most reliable approach.
Nominal return is the raw percentage gain on an investment before adjusting for inflation. Real return is the nominal return minus the inflation rate, representing your actual increase in purchasing power. A 10% nominal return with 3% inflation gives roughly a 7% real return. Always consider real returns when evaluating long-term investments.
Purchasing power is the quantity of goods and services that a unit of money can buy. As inflation rises, the same amount of money buys fewer things. For example, $100 in 2000 has the same buying power as roughly $180 in 2024 due to cumulative inflation. This calculator shows you exactly how much purchasing power you will lose over time.