Inflation Calculator
See how inflation erodes your purchasing power over time — and what today's dollars will be worth in the future.
Frequently Asked Questions
What is inflation?
Inflation is the rate at which prices rise over time, which reduces your purchasing power. If inflation is 3% and you have $10,000 in a savings account earning 0%, your money buys 3% less each year.
What is the average US inflation rate?
Historically, the US inflation rate has averaged around 3% per year since 1913. The Federal Reserve targets 2% inflation. During 2021–2023, inflation spiked to 7–9% due to supply chain disruptions and monetary policy.
How does inflation affect my savings?
If your savings earn less than the inflation rate, you're losing purchasing power even as the number in your account grows. A $10,000 account earning 0.5% while inflation runs at 3% loses roughly $250 in real value each year.
What is the best way to beat inflation?
Investing in assets that historically outpace inflation — like stocks (average ~7% real return), real estate, or I-Bonds — is the most common approach. High-yield savings accounts and CDs can help reduce the gap for emergency funds.
How do I calculate inflation between two years?
The formula is: Adjusted Value = Original Amount × (1 + annual rate)^years. For example, $1,000 in 2000 at 3% annual inflation equals $1,000 × (1.03)^26 ≈ $2,157 in 2026.