Inflation Calculator
Calculate how inflation affects the purchasing power of your money over time.
Historical US average: ~3%. Recent years: 2-7%
Future Value
$0
Original Amount
$0
Total Inflation Effect
$0
Cumulative Inflation
0%
Year by Year Breakdown
Advertisement
Understanding Inflation
Inflation is the rate at which the general level of prices for goods and services rises, causing purchasing power to fall.
How Inflation Works:
- 3% inflation: Something costing $100 today will cost $103 next year
- Compounding effect: Inflation compounds, meaning prices grow exponentially over time
- Purchasing power: $1,000 today won't buy the same amount of goods in 20 years
Historical Inflation Rates (US):
- Long-term average: ~3% per year
- 1970s-80s: 6-13% (high inflation period)
- 2010s: 1-2% (low inflation period)
- 2021-2023: 4-9% (post-pandemic spike)
Why This Matters:
- Retirement planning: Your savings need to outpace inflation
- Salary negotiations: Cost of living increases
- Investment returns: Real returns = nominal returns - inflation
- Fixed income: Bond payments lose value over time