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See how inflation erodes purchasing power over time �?or how much you need to save to maintain your standard of living. Free, no sign-up required.
This calculator uses the standard compound inflation formula to show how prices rise over time and how much purchasing power is lost. It also compares your investment return against inflation to show your real return �?what you actually gain in purchasing power.
Future Value = Amount × (1 + Inflation Rate)^Years
Real Return = ((1 + Nominal Return) / (1 + Inflation)) �?1
For example, $10,000 today at 3% inflation will require $18,061 in 20 years to buy the same goods. If your investment earns 7% nominally with 3% inflation, your real return is approximately 3.88% per year.
Inflation is the rate at which prices rise over time, reducing purchasing power. At 3% inflation, something costing $100 today costs $103 next year. The Fed targets 2% annual inflation as healthy for the economy.
The U.S. long-term average is ~3.1% per year (1913�?024). The Fed's target is 2%. For long-term planning, 2.5%�?% is a reasonable assumption.
If your savings earn 1% but inflation is 3%, your real return is -2% �?you're losing purchasing power. To preserve wealth, your investments must earn more than the inflation rate.
Nominal value is the face value in current dollars. Real value is adjusted for inflation and represents actual purchasing power. A $50,000 salary in 2000 had significantly more real purchasing power than $50,000 in 2024.
Invest in stocks (historically ~7% real return), I-bonds (CPI-adjusted), TIPS, or real estate. Avoid holding large amounts in low-yield cash accounts that don't keep pace with inflation.
See how investments grow to beat inflation.
Plan retirement savings accounting for inflation.
Find out how much to save monthly for any goal.
Educational purposes only. Not financial advice. Inflation rates are estimates. Past inflation does not predict future rates. Consult a licensed financial advisor.
