Inflation Calculator
Inflation is compound interest working against you. See what today's money will actually buy in the future — or how much you'll need then to match what you have now.
▸ Show year-by-year breakdown
| Period | $1 buys | Eroded | Real value |
|---|
Estimates are for illustration and education only. Future inflation is unknown; a constant rate is assumed.
How inflation quietly compounds
Inflation works exactly like compound interest, just in reverse: each year's price increase builds on the last. At 3%, prices don't rise 30% in ten years — they rise about 34%, and the gap widens every year. That's why the purchasing-power curve on this page mirrors the growth curves elsewhere on this site, flipped downward.
The halving time
The rule of 72 works here too: divide 72 by the inflation rate to estimate how many years it takes for money to lose half its purchasing power. At 3% that's about 24 years — within a single retirement, cash under the mattress loses half its value. At 6%, it happens in just 12.
Nominal vs. real returns
Whenever you see an investment return, subtract inflation to get the real return — the growth in what your money can actually buy. A 7% return during 3% inflation is roughly a 4% real return. This is the single most useful habit in long-term planning: think in today's dollars, always.
The antidote is investing
Cash loses to inflation by design; assets that grow faster than prices are the defense. See what investing does to the same numbers in our compound interest calculator (which has a built-in inflation adjustment), or check what your savings are really worth at retirement with the retirement calculator.
What $10,000 will really buy
Purchasing power of $10,000 in today's goods, at different inflation rates. The nominal number never changes — what it buys does.
| Inflation | 10 years | 20 years | 30 years | Halves in |
|---|---|---|---|---|
| 2% | $8,203 | $6,730 | $5,521 | 35 years |
| 3% | $7,441 | $5,537 | $4,120 | 24 years |
| 4% | $6,756 | $4,564 | $3,083 | 18 years |
| 6% | $5,584 | $3,118 | $1,741 | 12 years |
| 8% | $4,632 | $2,145 | $994 | 9 years |
Figures are rounded and assume a constant annual rate — illustrative only.
How inflation erodes money
Inflation is compound interest in reverse. A steady inflation rate shrinks what a fixed sum can buy, year after year, by exactly the same compounding math that grows an investment.