Inflation Calculator guide
Project how inflation raises prices and shrinks the value of cash. Enter an amount, an annual inflation rate, and a number of years to see future cost, remaining buying power, and how long until prices double.
The formula: inflation compounds
Inflation works exactly like compound interest, just pointed the wrong way. Future cost = cost today × (1 + r)^n, where r is the annual inflation rate as a decimal and n is the number of years. Buying power runs the same math in reverse: value in today's dollars = amount ÷ (1 + r)^n.
The common mistake is adding the years up. Ten years at 3% is not 30% cumulative inflation. It is 1.03^10 − 1 = 34.4%, because each year's price rise is applied to the already-higher price from the year before. Over 30 years the gap gets huge: 3% × 30 is 90%, but real compounding gives 143%.
Worked example: what your salary needs to become
Say you live comfortably on $60,000 a year and plan to retire in 25 years. At 3% inflation, the same lifestyle costs $60,000 × 1.03^25 = $125,627 a year when you retire. At 3.5% it is $141,795. That half-point difference adds more than $16,000 a year to the target, which is why retirement projections are so sensitive to the inflation assumption.
Now flip it. You have $50,000 sitting in a checking account earning nothing. In 20 years at 3% inflation, it still says $50,000, but it buys what $27,684 buys today. You lost 45% of its value without spending a cent. Cash is only safe in nominal terms.
Picking a realistic inflation rate
There is no single right number, so pick one on purpose. The Federal Reserve targets 2% a year, measured by the PCE price index. The Consumer Price Index (CPI-U), published monthly by the Bureau of Labor Statistics, is the figure most people mean by inflation, and it has averaged a little over 3% a year since 1913.
Recent history shows how much it moves. CPI inflation was under 2% in most years of the 2010s, jumped to 9.1% for the 12 months ending June 2022, and cooled to 2.9% for the 12 months ending December 2024. For long-range planning, 2.5% to 3% is a reasonable base case. Run a stress test at 4% to see how fragile your plan is.
Your personal inflation rate can differ from CPI. CPI is a weighted average basket. If you spend heavily on rent, health insurance, child care, or college tuition, categories that have often risen faster than the overall index, your real cost of living may climb faster than the headline number.
The rule of 72 shortcut
Divide 72 by the inflation rate and you get the rough number of years it takes prices to double. At 3%, prices double in about 24 years (the exact answer is 23.4). At 2%, about 36 years. At 6%, 12 years. The calculator shows the exact figure using ln(2) ÷ ln(1 + r).
The rule is useful for gut checks. A 30-year-old today will likely see everyday prices double at least once before retirement, and a fixed pension or annuity with no cost-of-living adjustment will lose half its buying power over that stretch.
Real returns: the number that actually matters
If your savings earn 4.5% while inflation runs 3%, your real return is about 1.5%, and precisely (1.045 ÷ 1.03) − 1 = 1.46%. Anything earning less than inflation is shrinking in real terms, even if the balance goes up. A savings account at 0.5% during 3% inflation loses roughly 2.4% of buying power per year.
This is why US investors look at Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds, both of which adjust with CPI, and why long-term plans assume a real return rather than a nominal one.
Mistakes that skew the result
Entering 0.03 instead of 3. The rate field takes a percent. Mixing monthly and annual rates: a monthly CPI change of 0.3% is roughly 3.7% annualized, not 0.3%. Using a single bad year as a 30-year assumption: 2022 was not normal, and neither was 2015, when CPI barely rose at all.
Also remember this tool projects forward from a rate you choose. It does not look up the historical CPI between two specific years. For questions like what $1,000 in 1990 is worth today, use the official BLS CPI Inflation Calculator, which uses actual index values.
How we calculate: sources
Frequently asked questions
How do you calculate inflation over several years?
Future cost = today's cost × (1 + rate)^years. At 3% for 10 years, $100 becomes $100 × 1.03^10 = $134.39. Inflation compounds, so it is not simply 3% × 10 = 30%.
What inflation rate should I use?
The Federal Reserve targets 2% a year over the long run. US CPI inflation has averaged a little over 3% a year since 1913. Many planners use 2.5% to 3% for long-range goals like retirement.
How much will $100 be worth in 20 years?
At 3% inflation, $100 in cash buys what about $55.37 buys today. Put another way, a $100 basket of goods will cost about $180.61.
What is the rule of 72 for inflation?
Divide 72 by the inflation rate to estimate how many years it takes prices to double. At 3%, prices double in about 24 years; at 6%, about 12.
Does it use official CPI data?
No. It projects forward with the rate you enter. For historical comparisons between two past years, the US Bureau of Labor Statistics publishes an official CPI inflation calculator.
What was the highest US inflation in recent years?
CPI inflation peaked at 9.1% for the 12 months ending June 2022, the highest reading since November 1981, according to the Bureau of Labor Statistics.
Is my data uploaded?
Everything runs in your browser. Nothing you enter is uploaded to a server or stored by us.
What is the difference between CPI and PCE inflation?
Both measure consumer prices. CPI, from the Bureau of Labor Statistics, is the headline number in the news. PCE, from the Bureau of Economic Analysis, covers a broader set of spending and usually runs a few tenths of a point lower. The Fed's 2% target uses PCE.
How do I adjust a salary for inflation?
Multiply by (1 + inflation rate) for each year. A $70,000 salary needs to be $70,000 × 1.03 = $72,100 next year just to keep pace with 3% inflation. A raise below the inflation rate is a real pay cut.