Inflation Calculator
Calculate the future value of money and the impact of inflation on purchasing power
This calculator shows how inflation affects the value of money over time and what today's money will be worth in the future.
About this Tool
The inflation calculator demonstrates how inflation erodes purchasing power over time by showing what today's money will be worth in the future. Inflation is the rate at which the general level of prices for goods and services rises, decreasing the purchasing power of currency. Understanding inflation's impact is crucial for long-term financial planning, retirement savings, salary negotiations, and investment decisions. This calculator helps you quantify the real value of money across time periods and plan accordingly to maintain your standard of living.
Common Use Cases
Retirement Planning
Calculate how much money you'll need in retirement to maintain current purchasing power. Account for decades of inflation when setting savings goals.
Salary Negotiations
Determine real salary increases adjusted for inflation. A 3% raise during 3% inflation means no real income growth in purchasing power terms.
Investment Goals
Set realistic investment return targets that beat inflation. Returns must exceed inflation to grow real wealth, not just nominal dollars.
Long-Term Budgeting
Project future costs for education, healthcare, or major purchases accounting for price increases over time to budget accurately.
Pro Tips
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Historical Inflation Rates
U.S. inflation has averaged about 3% annually over the past century, but varies significantly by period. Recent decades saw 2-3%, while the 1970s experienced double-digit inflation.
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Real vs Nominal Returns
Investment returns should be viewed after inflation. If investments return 7% but inflation is 3%, your real return is approximately 4%. Focus on beating inflation.
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Different Inflation Rates
Healthcare and education often inflate faster than general inflation (5-7% annually), while technology prices may decrease. Consider specific category inflation for planning.
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Compounding Effect
Even modest inflation compounds significantly over time. 3% annual inflation halves purchasing power roughly every 24 years, making early planning essential.