What Is the Inflation Calculator?
An inflation calculator shows how the cost of living rises over time and how inflation quietly shrinks the purchasing power of money you hold. It answers both 'what will this cost in the future?' and 'what is my money really worth later?'
How to use this calculator
Type your numbers into the fields above. The results change the moment you edit any input, so you can try one scenario after another and see exactly what moves. Most calculators show a short summary of the key figures, a line-by-line breakdown underneath, and — where it applies — a year-by-year schedule you can export to a spreadsheet. Everything runs in your browser; nothing is stored or sent anywhere. Treat the output as a planning estimate, not as final word on a real decision.
The Formula
Future cost = today's amount × (1 + inflation rate)^(years). Conversely, the future buying power of today's money equals today's amount ÷ (1 + inflation rate)^(years). The gap between the two is the real erosion of value.
Worked Example
At 3% inflation, $1,000 today will cost about $1,806 in 20 years, and the buying power of that original $1,000 will have fallen to roughly $554. The same dollars simply buy less.
Tips for the Most Accurate Estimate
- Use 2–3% as a long-run inflation assumption for planning.
- Keep cash in interest-bearing accounts to offset some loss.
- Invest for returns above inflation to preserve purchasing power.
- Apply inflation to salary, tuition, and retirement goals.
- Remember fixed payments (like some pensions) lose real value.
Frequently Asked Questions
Q: Is 3% a realistic inflation rate?
Historically U.S. inflation has averaged roughly 2–3% over the long run, though it swings year to year. Use a conservative figure for planning.
Q: How do I beat inflation?
Hold assets expected to return more than the inflation rate, such as diversified stock and bond portfolios suited to your timeline.
Q: Why does future cost and buying power differ?
Future cost is what you will pay later; buying power is what today's money is worth later. Both reflect the same erosion from opposite sides.