📉 Inflation Calculator
See how inflation erodes purchasing power over time and calculate the real value of money.…
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Understanding Inflation and Purchasing Power
Inflation is the gradual increase in the price level of goods and services, which reduces the purchasing power of money over time. A 3% annual inflation rate means $100 today buys only $97 worth of goods next year — and just $74 worth of goods after 10 years.
Historical US Inflation Rates
| Period | Average Annual Inflation |
|---|---|
| 1990–2000 | 2.9% |
| 2000–2010 | 2.5% |
| 2010–2020 | 1.8% |
| 2021 | 7.0% |
| 2022 | 8.0% (40-year high) |
| 2023–2024 | ~3–4% |
How to Use This Calculator for Financial Planning
Use the inflation calculator to: (1) Determine how much your retirement income needs to grow each year to maintain your purchasing power. (2) Evaluate whether your salary increases are keeping pace with inflation (real wage growth). (3) Calculate the inflation-adjusted return on investments — subtract the inflation rate from your nominal return to get your real return.
InflationPurchasing PowerCPIReal Value