Inflation Calculator
See how inflation erodes purchasing power over time — and how much more you will need in the future to match today's spending.
Future Cost
$14,802
Real Value Today
$6,756
Purchasing Power Lost
32%
At 4% inflation, $10,000 today costs $14,802 in 10 years. Your money loses 32% of its purchasing power.
How inflation erodes purchasing power
The future value of today's money is calculated as:
At 3% annual inflation, $100,000 today will require $134,392 in 10 years and $180,611 in 20 years to buy the same basket of goods. Your money must grow faster than inflation just to stand still.
The impact of inflation at different rates
| $100,000 today is worth… | 2% inflation | 4% inflation | 7% inflation |
|---|---|---|---|
| 10 years | $82,035 | $67,556 | $50,835 |
| 20 years | $67,297 | $45,639 | $25,842 |
| 30 years | $55,207 | $30,832 | $13,137 |
Real purchasing power in future dollars. At 7% inflation, $100,000 has the buying power of just $13,137 after 30 years.
Why this matters for retirement planning
If you plan to spend $50,000/year in today's dollars when you retire in 25 years, at 3% inflation you will need $104,689/year in future dollars to maintain the same lifestyle. Your retirement number must account for this — not just the current cost of living.
This is why the FIRE movement's 4% safe withdrawal rate and 25× expenses rule should be applied to inflation-adjusted expenses, not just today's numbers.
Frequently asked questions
What is inflation?
Inflation is the rate at which the general price level of goods and services rises over time, eroding purchasing power. If inflation is 3% per year, something that costs $100 today will cost $103 in a year. Over decades, inflation has a dramatic effect on the real value of money.
What is the historical average inflation rate?
In the United States, the long-run average CPI inflation rate is approximately 3–3.5% annually. In recent years (2021–2023), inflation peaked above 8% before moderating. India's historical average is around 5–6%. For long-term planning, 2–4% is a common assumption for developed economies.
How does inflation affect savings?
Inflation silently erodes the purchasing power of cash savings. $100,000 in a savings account earning 1% when inflation is 3% loses real purchasing power every year. To preserve wealth, your investment returns must exceed inflation. This is why "real return" (return minus inflation) is more meaningful than nominal return.
How do I protect my money from inflation?
Common inflation hedges include equities (stocks have historically outpaced inflation long-term), real estate, Treasury Inflation-Protected Securities (TIPS), I-Bonds, commodities, and REITs. Keeping large amounts in low-yield cash accounts guarantees a real loss during high-inflation periods.
Track your real net worth growth
TrackWorth tracks your net worth month over month — so you can see whether your wealth is growing faster than inflation or being slowly eroded.
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