See how inflation reduces your purchasing power over time
Inflation is the rate at which prices rise over time — which means the purchasing power of money falls. $1,000 today will not buy the same amount of goods in 10 years if prices have risen. This calculator shows you exactly how much more you would need to maintain the same purchasing power.
Future Value = Present Value × (1 + Inflation Rate)^Years
This tells you what today's amount will cost in the future. Alternatively, to find how much today's savings are worth in future terms, divide instead of multiply.
| Country / Region | Long-term average | Recent (2022–2024) |
|---|---|---|
| United States | ~3.1% (1914–2024) | 4–9% |
| European Union | ~2.5% (1997–2024) | 5–10% |
| United Kingdom | ~3.5% (1950–2024) | 7–11% |
| Japan | ~1.5% (1990–2024) | 2–4% |
At 3% annual inflation, prices double approximately every 24 years. At 5%, they double in about 14 years. At 7%, in about 10 years. This is called the Rule of 72 — divide 72 by the inflation rate to find how many years until prices double.
| Inflation rate | Years to double prices | $1,000 value after 20 years |
|---|---|---|
| 2% | 36 years | $1,486 |
| 3% | 24 years | $1,806 |
| 5% | 14 years | $2,653 |
| 7% | 10 years | $3,870 |
| 10% | 7 years | $6,727 |
If your savings earn less interest than the inflation rate, you are losing purchasing power even as your nominal balance grows. A savings account earning 1% while inflation runs at 4% means your real purchasing power shrinks by 3% per year. Over 10 years, $10,000 in such an account would lose roughly 26% of its real value.
To preserve purchasing power, your investments need to grow faster than inflation. Historically, diversified equity investments have returned 4–7% above inflation over long periods, though with significant year-to-year variation.
It shows how much more an amount will cost in the future due to inflation, assuming a constant annual rate. Enter today's amount, expected inflation rate, and number of years to see the future equivalent cost.
For long-term planning, 2–3% is a reasonable baseline for developed economies where central banks target low inflation. For short-term projections or high-inflation environments, use a rate closer to current conditions.
No — this calculator projects forward using a fixed rate. For historical inflation data, central bank websites and statistical offices provide CPI (Consumer Price Index) data by year and category.
Retirement savings must outpace inflation to maintain purchasing power. A $500,000 retirement fund at age 65 is worth only $372,000 in today's money after 10 years of 3% inflation. This is why retirement planners typically target returns well above the inflation rate.
Inflation is the general rise in prices across the economy, measured by indices like CPI. Cost of living refers to the actual expenses in a specific location. Inflation affects cost of living, but local factors like housing costs and wages create significant regional variation.