Inflation calculator
For guidance only. This is not financial advice.
The formula
- Future cost = amount × (1 + inflation)^years
- Buying power = amount ÷ (1 + inflation)^years
- Loss = 1 − 1 ÷ (1 + inflation)^years
Worked example
You keep $10,000 uninvested for 20 years, with inflation at 2.5%:
- Factor: 1.025^20 = 1.6386.
- What costs $10,000 today will cost $16,386.16.
- Your $10,000 will buy what $6,102.71 buys today.
- You lose 39% of your buying power.
An inflation rate that looks modest can take a large bite over decades. You still have the same money, but it buys less.
Using the result
Use it to adjust long-term goals and judge the return on your savings. Read how inflation affects your savings or try the retirement calculator, which already factors it in.
Frequently asked questions
What inflation rate should I use?
You could use recent consumer price data, such as the CPI published by the U.S. Bureau of Labor Statistics, or a central bank target such as 2%. Nobody knows future inflation for certain.
Are buying power and future cost the same thing?
They are two sides of the same calculation. Future cost shows what today's purchase will cost later. Buying power shows what your money will be worth in today's terms if it does not grow.
How can I protect my savings?
Only a return above inflation preserves buying power. Each option has its own risks, and this site does not give personal advice.