How Inflation Impacts You
Purchasing Power
Inflation Calculator
Understand how the value of your money changes over time. Forecast how much you will need in the future, or see what your parents' $10,000 would buy today.
Two Modes of Mastery
Past Value
"How much would my $100 today be worth in 1990?"
Future Value
"What will $1,000 be worth in 20 years at 3% inflation?"
Calculation Matrix
Step 1
Enter Amount
Step 2
Avg. Inflation %
Step 3
Time (Years)
Formula for Future Value
Amount × (1 + r)^nWhere r = rate and n = years
Frequently Asked Questions
What is a good average inflation rate to use?
For long-term financial planning in the United States, a historical average of 3% to 4% is commonly used. However, inflation can spike during periods of economic instability. We recommend testing a "worst-case" scenario (e.g., 5-6%) when planning for retirement.
How does inflation affect my savings?
Inflation acts as a "hidden tax." If your money is in a bank account earning 1% interest, but inflation is 3%, your money is actually losing 2% of its purchasing power every year. This is why investing is crucial for long-term wealth preservation.
Is inflation always a bad thing?
Not necessarily. Central banks generally aim for a low, predictable inflation rate (around 2%). This encourages spending and investment, which fuels economic growth. Deflation (falling prices) can actually lead to economic recessions, as consumers delay purchases expecting cheaper goods in the future.