📈 Inflation Calculator
Calculate how inflation affects purchasing power and money value over time periods.
Understanding Inflation
📉 Purchasing Power
Inflation reduces the purchasing power of money over time. What costs $100 today will cost more in the future due to inflation.
📊 Historical Context
US inflation has averaged about 3% annually over the long term. Understanding this helps with financial planning and investment decisions.
💡 Planning Tool
Use inflation calculations for retirement planning, salary negotiations, investment returns, and understanding real vs. nominal values.
Inflation Calculator FAQ
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. A 3% inflation rate means what costs $100 today will cost $103 next year.
How do I use this for retirement planning?
Calculate how much your current expenses will cost in retirement. If you spend $50,000 today and retire in 30 years with 3% inflation, you'll need about $121,363 to maintain the same lifestyle.
What's the difference between nominal and real returns?
Nominal returns don't account for inflation, while real returns do. A 7% investment return with 3% inflation gives a real return of about 4%.
How accurate are inflation projections?
This calculator uses compound growth formulas with your specified rate. Actual inflation varies year to year, so use historical averages for long-term planning and adjust periodically.