Inflation Calculator

How it works

Inflation is the gradual rise in the general level of prices, which means each dollar buys slightly less over time. Even a modest 3% annual inflation rate cuts the purchasing power of a dollar in half over about 24 years. Over a working lifetime, ignoring inflation can mean badly underestimating how much you need to save for retirement.

This calculator works two directions. Set it to "today → future" to see what something costing $X today will cost N years from now if prices rise at a given rate. Set it to "future → today" to see the real-dollar (inflation-adjusted) value of a future dollar amount expressed in today's purchasing power.

Both use the simple compound formula: Future = Present × (1 + r)^n for forward calculations, and the inverse for backward. The rate "r" is critical and surprisingly variable. The Federal Reserve targets 2% annual US inflation but actual outcomes vary — recent years have seen rates as high as 9% and as low as 0%. The long-run US average since 1913 is roughly 3.2%.

For long-range planning, most financial planners use 2.5–3.5%. For short-range purchasing decisions, look up the most recent 12-month CPI reading from the Bureau of Labor Statistics. For very long horizons (30+ years), the difference between 2% and 4% inflation is enormous — what matters is your real (after-inflation) investment return, not the nominal return.

Inflation also has uneven effects: education and healthcare have historically inflated faster than the headline CPI, while consumer electronics inflate slower (or deflate). Use category-specific inflation rates if you're planning for those expenses specifically.