How the inflation calculator works
Inflation compounds just like interest, except it works against you. If prices rise 3% this year and another 3% next year, the second increase applies to the already-higher price. The calculator uses the average inflation rate you enter to show two things: how much an item that costs a given amount today would cost in the future, and how much buying power a fixed amount of cash would have left.
The formula
Future cost = amount × (1 + inflation rate)years. Future purchasing power = amount ÷ (1 + inflation rate)years.
Example
At 3% average inflation, something that costs $100 today would cost about $134.39 in 10 years. Looked at the other way, $100 kept under the mattress for 10 years would only buy what about $74.41 buys today — a loss of roughly a quarter of its value.
Why it matters for planning
Inflation is why long-term savings need to earn a return above the inflation rate. It also matters for retirement: an income that feels comfortable today may feel tight in 20 years. The Federal Reserve targets 2% inflation over time, but actual rates have varied widely, so it is wise to test a few different rates. For official historical figures, the U.S. Bureau of Labor Statistics publishes the Consumer Price Index (CPI) every month.
Frequently asked questions
What inflation rate should I use?
For long-term planning many people use 2.5%–3.5%. U.S. inflation has averaged roughly 3% per year over the long run, with much higher and lower periods.
What is the CPI?
The Consumer Price Index tracks the average change in prices paid by urban consumers for a basket of goods and services. It is the most common U.S. inflation measure.
How can I protect savings from inflation?
Options include investing for long-term growth, Treasury Inflation-Protected Securities (TIPS) and I bonds, and keeping cash in accounts that pay competitive interest.
Does this use historical CPI data?
No. It projects using the single average rate you enter, which makes it useful for future planning.
Results are estimates for educational purposes only and are not financial, tax, legal or medical advice. See our disclaimer. Last reviewed 2026-10-22.