About this calculator
Inflation is a slow tax on idle money. At 3% a year, prices double about every 24 years — the $10,000 that feels substantial today buys what roughly $5,500 buys now, two decades from today. This calculator shows both directions of that math: what something costing a given amount today is likely to cost in the future, and what a future sum (a salary, a pension, a savings target) is worth in today's purchasing power.
The second number is the one that matters for planning. A retirement target of "$1 million" sounds comfortable until you convert it: at 3% inflation over 30 years it has the buying power of about $412,000 today.
How to use it
- Enter an amount in today's dollars.
- Set an inflation assumption — the US long-run average is around 3%, the Federal Reserve targets 2%, and the 2021–2023 spike peaked above 9%.
- Choose the horizon, and read both results: the future price tag and the today's-dollars value.
The formula
Prices are assumed to rise by the same percentage each year, compounding — exactly like interest in reverse. Purchasing power is the same formula divided instead of multiplied: Amount ÷ (1 + rate)^years.
Worked example
At 3% inflation over 20 years, something that costs $10,000 today will cost $18,061.11. Turned around, $10,000 received 20 years from now will buy only what $5,536.76 buys today — cumulative inflation over the period is 80.6%. Your money needs to grow by at least that much just to stand still.
Sources: Purchasing-power conversion using compound inflation; long-run US CPI has averaged about 3% per year. Last updated: October 2026.
Frequently asked questions
What inflation rate should I assume?
US CPI inflation has averaged roughly 3% a year over the very long run, about 2.5% over recent decades, and the Federal Reserve targets 2%. Using 3% for long-horizon planning is a reasonable, slightly cautious default. Short periods can be far from any average — inflation peaked at 9.1% in mid-2022.
How does inflation affect savings in a bank account?
If your account pays less than inflation, your balance grows while your purchasing power shrinks. At 0.1% interest and 3% inflation, $10,000 is "worth" about $7,400 in today's dollars after ten years despite the balance rising. Cash for emergencies is necessary; large long-term cash piles are a slow, guaranteed loss.
What is the real rate of return?
Your return minus inflation, approximately. An investment returning 7% with 3% inflation has a real return of about 4% — that is the rate at which your actual buying power grows. Retirement and savings projections are most honest when done in real terms.
Has inflation always been positive?
Not always — the US saw deflation in the early 1930s and brief dips in 2009 and 2015 — but sustained deflation is rare in modern economies, and central banks actively target low positive inflation. Planning around gentle, persistent inflation is the realistic default.
What formula does this inflation calculator use?
Future cost = Amount × (1 + inflation rate)^years Prices are assumed to rise by the same percentage each year, compounding — exactly like interest in reverse. Purchasing power is the same formula divided instead of multiplied: Amount ÷ (1 + rate)^years. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.