Inflation Calculator: What Will Your Money Be Worth?
Inflation is the silent eraser of purchasing power. This free calculator converts money through time: what a past amount is worth today, what today's money will buy in the future, and how much a salary or budget needs to grow just to keep up.
Inflation Calculator
How to Use This Calculator
Enter an amount, a number of years, and an inflation rate — 2% to 3% per year is the usual long-term planning range, but try 4% or 5% to see a pessimistic case.
Choose the direction: "today's money → future value" answers "what will this amount buy in N years?" while "past money → today's value" answers "what would that old price be in today's money?" Click Calculate to see the converted amount and the total percentage change in prices.
The Formula
Forward: future value = amount × (1 + inflation)ʸᵉᵃʳˢ. Backward: past value = amount ÷ (1 + inflation)ʸᵉᵃʳˢ. It's compound growth, the same math as interest — only working against you.
Worked example: $1,000 today at 3% inflation for 10 years. Future value = 1,000 × 1.03¹⁰ = $1,344. Prices rise 34.4% over the decade, so in 10 years you'll need $1,344 to buy what $1,000 buys today. Run backward: $1,344 ten years ago is worth 1,344 ÷ 1.03¹⁰ = $1,000 today.
Tips
Inflation-proof your assumptions. When planning retirement or a long-term savings goal, always account for inflation — a $60,000 income goal in 30 years at 3% inflation is really a $145,600 income goal.
Check your salary against inflation annually. A 2% raise during 3% inflation is a pay cut in real terms — use that number in negotiations.
Cash is not safe from inflation. Money sitting in a 0.1% checking account loses purchasing power every single year. Only money you need within a few months belongs there; the rest should at least be earning near the inflation rate.
Frequently Asked Questions
What is inflation and how is it measured?
Inflation is the rate at which the general price level rises, shrinking the purchasing power of money. It's most commonly measured by the Consumer Price Index (CPI), which tracks the price of a fixed basket of goods and services — housing, food, transport, medical care and more. A 3% inflation rate means the basket that cost $100 last year costs $103 this year.
What is a normal rate of inflation?
Central banks generally target around 2% inflation per year, which is considered healthy for economic growth. Inflation runs higher in some periods — several percent in recent years — and occasionally lower or negative (deflation). For long-term planning, 2% to 3% per year is a commonly used assumption.
How does inflation affect my savings?
Inflation quietly taxes cash. If your savings earn 1% while inflation runs at 3%, your real return is −2%: the balance number grows, but your purchasing power shrinks every year. The antidote is earning more than inflation — historically stocks and real estate have outpaced it over long periods, while plain savings accounts often have not.
What is the difference between nominal and real returns?
A nominal return is the raw percentage your investment earned. The real return is what's left after inflation. A 7% nominal return with 3% inflation is a real return of about 4%. Real returns are the number that matters for long-term planning — it's what your money actually buys in the future.
How much money will I need in the future?
Use the rule of 72 to estimate: divide 72 by the inflation rate to find how many years it takes prices to double. At 3%, prices double roughly every 24 years — so $50,000 of today's spending will cost about $100,000 in 24 years. This calculator shows the exact numbers for any amount, rate and time horizon.
How does inflation affect fixed-income retirees?
It is their biggest risk. A $3,000 monthly budget at 3% inflation needs about $5,400 in 20 years just to buy the same things. Pensions without cost-of-living adjustments lose value every year, which is why retirement plans should hold growth assets even after you stop working.
Why does my grocery bill rise faster than the reported inflation rate?
The headline CPI averages hundreds of categories, and its housing component (which renters feel less directly) smooths the number. Food and services with lots of labor cost tend to outpace the average. For personal planning, use your own spending history - it is your inflation rate that matters.
How do I protect my savings from inflation?
Match the investment to the timeline: cash for money needed within a year, TIPS or I-bonds for 1-5 year money (their principal adjusts with inflation), and a diversified stock portfolio for money with a 10+ year horizon - equities have historically beaten inflation by 5-7% annually over long periods.