Inflation Calculator
See how inflation erodes the purchasing power of your money over time. Enter any amount and choose a starting and ending year to calculate the equivalent value adjusted for inflation using historical CPI data and projected inflation rates.
What Is Inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time, eroding the purchasing power of money. When inflation occurs, each unit of currency buys fewer goods and services than it did previously.
This calculator uses the Consumer Price Index (CPI) — the most widely used measure of inflation in the United States. The CPI tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The formula used is:
Future Value = Amount × (1 + Inflation Rate)Years
For example: $100 at 3% annual inflation for 10 years = $100 × 1.0310 = $134.39
Purchasing Power: The amount of money in the starting year's dollars that equals the future value. In the example above, $134.39 in 10 years would have the same purchasing power as $100 today.
How Does the Inflation Calculator Work?
The calculator offers three methods:
- Historical CPI: Uses actual historical inflation data from 1913 to 2025 based on the Consumer Price Index.
- Projected (Forecast): Uses historical data up to 2025 and projected rates from 2026 onward based on economic forecasts.
- Custom Rate: Allows you to enter your own annual inflation rate for personalized scenarios.
The calculator shows the future value of your money after inflation, the total inflation rate over the period, the average annual inflation rate, and the change in purchasing power.
US Inflation Rate History
- 2026 (projected): 3.4%
- 2025: 2.7%
- 2024: 2.9%
- 2023: 4.1%
- 2022: 8.0%
- 2021: 4.7%
- 2020: 1.2%
❓ Inflation Calculator FAQ
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time, eroding the purchasing power of money. When inflation occurs, each unit of currency buys fewer goods and services than it did previously.
How is inflation measured?
Inflation is most commonly measured using the Consumer Price Index (CPI), which tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
How does inflation affect my savings?
Inflation reduces the purchasing power of your savings. If your savings don't earn interest at least equal to the inflation rate, your money will lose value over time. For example, with 3% inflation, $1,000 today will have the purchasing power of only $744 in 10 years.
What is the difference between nominal and real returns?
Nominal returns are the stated returns on an investment without adjusting for inflation. Real returns are adjusted for inflation and represent the actual increase in purchasing power. For example, a 5% nominal return with 3% inflation gives a 2% real return.
What is the average inflation rate in the US?
The average inflation rate in the US from 1913 to 2025 is approximately 3.3% per year. Recent rates have been: 2025 (2.7%), 2024 (2.9%), 2023 (4.1%), 2022 (8.0%), 2021 (4.7%).
What is purchasing power?
Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Inflation decreases purchasing power over time.
How do I calculate the inflation rate between two years?
The inflation rate is calculated as: ((CPI in Year 2 - CPI in Year 1) / CPI in Year 1) × 100. This calculator does this automatically using historical CPI data and projected rates.
What is the CPI?
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is the most widely used measure of inflation in the United States.
What is the current inflation rate for 2026?
Projected inflation for 2026 is estimated at 3.4%. Actual rates may vary based on economic conditions, policies, and global events. This calculator uses the latest projections available.
How does inflation affect retirement planning?
Inflation is a critical factor in retirement planning. If you need $50,000 per year to live today, with 3% inflation, you would need $90,000 per year in 20 years to maintain the same standard of living. This calculator helps you estimate future needs.
What is the difference between inflation and deflation?
Inflation is the increase in the general price level of goods and services. Deflation is the decrease in the general price level, meaning money gains purchasing power over time. Deflation is less common and can be harmful to the economy.
How does inflation affect mortgage rates?
Higher inflation typically leads to higher mortgage rates because lenders need to compensate for the decreased purchasing power of future interest payments. Central banks often raise interest rates to combat inflation.
What is core inflation?
Core inflation excludes volatile food and energy prices to provide a more stable measure of underlying inflation trends. It is often used by economists and policymakers to gauge long-term inflation trends.
How accurate are inflation projections?
Inflation projections are estimates based on economic models and forecasts. They can be affected by unexpected events like supply chain disruptions, policy changes, or global crises. This calculator uses projections from reputable sources like the CBO and Federal Reserve.
What is the relationship between inflation and interest rates?
Central banks, like the Federal Reserve, typically raise interest rates to combat high inflation. Higher interest rates make borrowing more expensive, which can slow economic activity and reduce inflationary pressures.
How can I protect my money from inflation?
You can protect your money from inflation by investing in assets that typically outpace inflation, such as stocks, real estate, Treasury Inflation-Protected Securities (TIPS), and commodities. Diversification is key to managing inflation risk.
What is the difference between CPI and PCE?
CPI (Consumer Price Index) measures the average change in prices paid by urban consumers. PCE (Personal Consumption Expenditures) measures the prices of goods and services consumed by households. PCE is the Federal Reserve's preferred inflation measure.