Inflation calculator

Find out what today's amount will cost in the future, and what future money is really worth in today's prices, at a constant rate of inflation.

How this calculator works

Inflation erodes purchasing power. If prices rise by 3% a year, something that costs $1,000 today costs about $1,344 in ten years, while $1,000 set aside in a drawer in ten years buys only about $744 of today's goods. Both directions matter: the first for planning future expenses, the second for judging whether a savings balance is really growing.

This calculator uses a constant inflation rate, which is a simplification — real inflation varies year to year and differs sharply by spending category. Housing, healthcare and education have historically risen faster than the headline figure, while electronics and clothing have often fallen. For a retirement or education plan, a slightly higher rate for the relevant category is more conservative than the general rate.

The formula

Future cost of a fixed basket = amount × (1 + i)^years. Purchasing power of a fixed amount = amount ÷ (1 + i)^years. Purchasing-power loss is 1 − 1/(1 + i)^years.

The two are not independent: at 3% for 10 years, costs rise 34.4% and purchasing power falls 25.6% — the same fact expressed two ways.

Worked example

At 3% inflation, 1,000 today becomes $1,343.92 of spending in 10 years. Put the other way, 1,000 held as cash in 10 years would buy only $744.09 of what it buys today — a 25.6% loss of purchasing power.

Common mistakes

• Forgetting inflation when planning retirement. A spending need of $60,000 today is roughly $120,000 in 30 years at 2.5% inflation. Plan in today's money and then adjust once.
• Treating cash as risk-free. A savings account paying less than inflation loses purchasing power every year, even though the nominal balance rises.
• Using one rate for every category. Healthcare and education have historically outpaced headline CPI. Use category-specific rates for long-term goals.