Reckonary / Finance / Inflation calculator
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Buying power is what $1,000 in 10 years is worth in today's dollars.
Inflation is the slow rise in prices over time. A dollar buys a little less each year, so the same money sitting in cash quietly loses value. This calculator shows two sides of that: what today's purchase will cost years from now, and what a future sum is really worth in today's money. Both come from one simple idea — prices multiply by a fixed rate each year, the same way savings compound.
The future cost answers one question: if a basket of goods costs $1,000 now and prices rise 3% a year, what will the same basket cost later? After 10 years it's about $1,344, after 20 years about $1,806, and after 30 years about $2,427. The price more than doubles over a working lifetime without anything unusual happening — just steady, ordinary inflation.
Buying power runs the same math backwards. A sum you'll receive in the future is divided by that growth, not multiplied, because each year of inflation that has to pass shaves a bit off what it can buy. At 3%, $1,000 set aside today and left untouched buys only about $744 of today's goods in 10 years, $554 in 20 years, and $412 in 30. The number on the bill never changes; what it reaches for keeps shrinking.
A useful gut-check is how many years it takes inflation to cut buying power in half. At 2% it takes about 35 years, at the long-run US average near 3% it's about 23 years, and at a sharp 7% it's only about 10 years. So a 25-year-old today, retiring at a normal age, should plan for cash to lose roughly half its reach by the time they stop working — and possibly half again before the end of a long retirement.
A pay raise only helps if it beats inflation. If your salary goes up 4% in a year when prices rise 3%, your real gain is not 1% — it's closer to 0.97%, because the extra income is itself spent at the higher prices. A raise that exactly matches inflation leaves you standing still, and any raise below the inflation rate is a quiet pay cut: more dollars, less that they buy. This is why "real wages," adjusted for inflation, matter more than the headline number on a pay stub.
The same logic applies to a savings account. If cash earns 1% in a year when prices rise 3%, the balance grows on paper but loses about 2% of its real worth. A return above the inflation rate is the only thing that actually builds wealth; everything below it is treading water or sinking.
Where do I find the inflation rate to enter?
Most people use the consumer price index published by their national statistics office. In the US that's the Bureau of Labor Statistics CPI; recent annual figures have run roughly 2% to 8% depending on the year.
Should I use the past inflation rate or a future estimate?
For looking back at how much prices have already risen, use the actual rate for that period. For projecting forward, there's no certain number, so test a range — a low, middle, and high rate — rather than trusting one figure.
Is this the same as a cost of living comparison?
No. This shows how prices change over time in one place. A cost of living comparison looks at price differences between two places at the same moment, like moving from one city to another.
Why is my real raise smaller than my pay raise?
If your pay goes up 4% but prices rise 3%, your buying power only improved by about 1%. A raise below the inflation rate actually leaves you able to buy less than before.
Last reviewed June 2026. This tool is for education, not financial advice.