How to use the inflation calculator
- Enter an amount, such as a monthly budget, a salary, a savings balance or the price of something.
- Enter an expected inflation rate and the number of years.
You'll see two sides of inflation at once: how much the same things will cost in the future, and what that amount will be worth in today's money if it doesn't grow.
Inflation formulas
Future cost = Amount × (1 + inflation)^years
Today's value = Amount ÷ (1 + inflation)^years
Example: at 3% inflation, $1,000 of spending today will cost about $1,344 in 10 years. Turned around, $1,000 kept in cash for 10 years will only buy what about $744 buys today, a 26% loss of buying power.
How fast inflation adds up
What $1,000 of today's spending costs in the future:
| Inflation rate | In 10 years | In 20 years | In 30 years |
|---|---|---|---|
| 2% | $1,219 | $1,486 | $1,811 |
| 3% | $1,344 | $1,806 | $2,427 |
| 4% | $1,480 | $2,191 | $3,243 |
| 5% | $1,629 | $2,653 | $4,322 |
Even "low" inflation of 3% more than doubles prices over 30 years. That's why retirement plans need income that keeps rising, not a fixed amount.
Uses for this calculator
- Salary negotiations: check whether a raise beats inflation. A 2% raise during 4% inflation is a pay cut in real terms.
- Retirement planning: turn today's budget into the amount you'll need in future dollars.
- Savings decisions: see how much cash loses by sitting in a 0% account.
- Big purchases: estimate the future cost of college, a car or a home.
This calculator uses a constant rate you choose. Real inflation changes from year to year.
Frequently asked questions
What is inflation?
Inflation is the general rise in prices over time. When inflation is 3% a year, something that costs $100 today costs about $103 next year. Your money buys a little less each year unless it grows at least as fast as prices.
What inflation rate should I use?
Many central banks, including the US Federal Reserve and the Bank of England, target about 2% a year over the long run. Actual inflation varies — some recent years have been much higher. For long-term planning, 2.5% to 3.5% is a common, slightly cautious assumption.
What's the difference between future cost and today's value?
Future cost answers "what will this price become?" — $100 of groceries today might cost $134 in 10 years at 3%. Today's value answers the reverse — $100 received in 10 years would only buy what about $74 buys now.
How do I protect my savings from inflation?
Earn a return that's higher than inflation. High-yield savings accounts and inflation-protected bonds help for shorter goals; diversified long-term investments have historically beaten inflation over decades, though with ups and downs.