Inflation Calculator
See how inflation erodes purchasing power over time. At 3% average inflation, prices double roughly every 24 years.
Inflation is the silent thief of wealth. At 3% annual inflation — the US historical average — $100,000 today buys only $55,368 worth of goods in 20 years. This calculator shows exactly how much purchasing power you'll lose over any time period, helping you understand why investing (not just saving) is essential for preserving wealth.
For FIRE planning, inflation is the most important variable after investment returns. If you earn 7% nominal returns but inflation is 3%, your real return is only ~4%. Using nominal returns without inflation adjustment is the #1 mistake in retirement planning.
Your $100,000 will have the purchasing power of $55,368 in 20 years. You'd need $180,611 to buy the same things — a 44.6% erosion.
Your numbers
US historical average: ~3.1%. 1970s peaked at 13.5%.
Results
Purchasing power in 20 years
$55,368
What your $100,000 will actually buy
Amount needed to match today
$180,611
To buy the same things in 20 years
Real value lost
$44,632
44.6% erosion
Rule of 72
24.0 yrs
Years for prices to double at 3%
Year-by-year erosion
| Year | Purchasing Power | Erosion |
|---|---|---|
| Year 1 | $97,087 | -2.9% |
| Year 2 | $94,260 | -5.7% |
| Year 4 | $88,849 | -11.2% |
| Year 6 | $83,748 | -16.3% |
| Year 8 | $78,941 | -21.1% |
| Year 10 | $74,409 | -25.6% |
| Year 12 | $70,138 | -29.9% |
| Year 14 | $66,112 | -33.9% |
| Year 16 | $62,317 | -37.7% |
| Year 18 | $58,739 | -41.3% |
| Year 20 | $55,368 | -44.6% |
Why inflation matters for FIRE
Inflation is the silent tax on your savings. At 3% inflation, $1 million today has the purchasing power of only ~$544K in 20 years. This is why FIRE calculators use real (inflation-adjusted) returns.
If your investments earn 7% nominal and inflation is 3%, your real return is roughly 4%. That's the number that matters for long-term planning. Using nominal returns without adjusting for inflation is the most common FIRE planning mistake.
Historical US inflation averages: 1913–2024 ≈ 3.1%, 1970s peak ≈ 13.5%, 2010s ≈ 1.7%, 2022 peak ≈ 9.1%. Plan for 2.5–3.5% as a reasonable long-term assumption.
How to use this calculator
Today's amount — The dollar amount you want to evaluate. This could be your savings, salary, or any other amount whose future purchasing power you want to understand.
Inflation rate — The expected annual inflation rate. US historical average: ~3.1%. Use 2.5% for optimistic, 3.5% for conservative planning.
Time period — How far into the future to project. The longer the period, the more dramatic the erosion. At 3%, prices double every 24 years.
Real-world examples
$100K savings over 20 years at 3%
Purchasing power drops to ~$55,368. You'd need $180,611 to buy the same things. That's why keeping money in a 0.5% savings account is effectively losing 2.5% per year.
$50K salary needs to become $90K in 20 years
At 3% inflation, a $50K lifestyle requires a ~$90K salary in 20 years just to stay even. Without raises matching inflation, you get poorer every year.
1970s hyperinflation: 13.5% for a decade
$100K at 13.5% inflation for 10 years: purchasing power drops to ~$27,000. This is why "cash is trash" during high inflation — invest in assets that appreciate.
Formula
Future purchasing power
- PP = What your money can actually buy in the future
- inflation_rate = Annual inflation rate (decimal)
- years = Time period
Rule of 72 (doubling time)
At 3% inflation, prices double in ~24 years. At 6%, they double in ~12 years.
Frequently asked questions
What inflation rate should I use for planning?
2.5–3.5% for long-term US planning. The 100-year average is 3.1%, but recent decades have been lower. For FIRE calculations, use 3% as a reasonable middle ground.
How does inflation affect my FIRE number?
Dramatically. A $1M FIRE number at 3% inflation becomes $1.8M in 20 years in nominal terms. This is why you should use real (inflation-adjusted) returns in all FIRE calculations — it automatically accounts for inflation.
Is cash ever safe from inflation?
No — cash loses purchasing power every year. Even high-yield savings accounts (4–5%) barely keep up with inflation after taxes. Only investments in appreciating assets (stocks, real estate) reliably outpace inflation over the long term.
What about deflation?
Deflation (negative inflation) is rare but does happen. In deflation, cash gains purchasing power. However, deflation is usually associated with economic recessions, which also reduce investment returns and employment.