Inflation Calculator
Calculate how inflation affects purchasing power over time — using historical CPI data from 1913 to present or custom rates for future projections.
Quick Answer
How much is $100 from 10 years ago worth today?
At 3% average inflation, $100 from 10 years ago would be worth about $134 today. Conversely, $100 today has the buying power of only $74 compared to 10 years ago. Use the Rule of 72: divide 72 by inflation rate to find years until prices double.
Calculate how inflation affects your money's purchasing power over any time period.
Key Takeaways
- At 3% annual inflation, prices double roughly every 24 years
- The Federal Reserve targets 2% inflation as optimal for economic health
- US average inflation since 1913 is approximately 3.3% per year
- Use TIPS and I Bonds to protect savings from inflation erosion
Inflation Projections
Purchasing Power Over Time
Year-by-Year Breakdown
| Year | Inflation Rate | Value (Nominal) | Value (Real) | Power Lost |
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Understanding Inflation
What Is Inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time. As inflation increases, each dollar buys fewer goods and services, reducing your purchasing power. For example, if a basket of goods costs $100 today and inflation is 3% annually, that same basket will cost $103 next year.
Why Does Inflation Matter?
Inflation directly affects your savings, investments, and retirement planning. Money sitting in a low-interest savings account loses value over time if the interest rate doesn't keep pace with inflation. Understanding inflation helps you make smarter financial decisions about where to keep your money and how much you need to save for future goals.
Historical US Inflation Rates
US inflation has varied significantly throughout history:
- 1913-2024 average: 3.3% per year
- 1970s: High inflation, averaging 7.1%
- 2010s: Low inflation, averaging 1.8%
- 2020-2023: Elevated inflation, averaging 4.7%
Protecting Against Inflation
To preserve purchasing power, consider investments that historically outpace inflation:
- Stocks: Long-term average return ~10% annually
- Real Estate: Property values tend to rise with inflation
- TIPS: Treasury Inflation-Protected Securities adjust with CPI
- I Bonds: Savings bonds with inflation protection
Frequently Asked Questions
Inflation reduces purchasing power by increasing the cost of goods and services over time. A dollar today will buy less in the future if inflation continues. For example, at 3% annual inflation, $100 today will only have the purchasing power of about $74 in 10 years.
The Federal Reserve targets a 2% annual inflation rate as optimal for a healthy economy. This rate encourages spending and investment while maintaining price stability. Rates significantly above or below 2% can indicate economic problems.
To protect against inflation, invest in assets that historically outpace inflation such as stocks, real estate, and Treasury Inflation-Protected Securities (TIPS). Keeping too much cash loses value over time due to inflation eroding purchasing power.
The average US inflation rate has been approximately 3.3% since 1913. However, it varies significantly by decade - the 1970s saw high inflation averaging 7.1%, while the 2010s averaged only 1.8%.
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