Short answer: inflation quietly shrinks what a dollar buys. Enter an amount, a time horizon, and an inflation rate, and this calculator shows both sides — what today’s amount will cost in the future, and what holding the same cash will actually buy you. Example: $50,000 at 3% inflation for 20 years → things that cost $50,000 today will cost about $90,306, and $50,000 sitting in cash will buy what $27,684 buys today — a 44.6% loss.
| If you hold the same dollars, what they’ll buy you then (in today’s terms) | — |
| Purchasing power lost | — |
| Price level increase over the period | — |
See the full breakdown
Educational estimate only — not financial advice. This assumes one steady inflation rate; actual CPI varies year to year (and by category — housing, food, and healthcare rarely move together). The default 3% is a long-run US average for illustration, NOT a live CPI reading or a forecast; the official figure is published monthly by the Bureau of Labor Statistics.
How this calculator works
Two applications of the same formula. Future cost = amount × (1 + inflation)^years. Real (today’s-dollar) value = amount ÷ (1 + inflation)^years. The two numbers are reciprocals of the same process, which is why the chart slopes down while prices climb. The 3% default is a long-run US CPI average — the Bureau of Labor Statistics publishes the current official rate monthly, and your own inflation (heavy on rent, tuition, or healthcare) may run hotter.
Worked example
- $50,000, 20 years, 3% → future cost $90,306, real value $27,684, purchasing power lost 44.6%.
- $100,000, 10 years, 2.5% → future cost $128,008, real value $78,120.
- Long horizon: $20,000, 30 years, 4% → future cost $64,868 — more than triple — and cash held buys just $6,166 in today’s terms.
FAQs
What inflation rate should I use? For long planning horizons, 2.5–3% is the common convention (near the Fed’s 2% target plus a margin). For a specific goal — college, healthcare — a higher, category-specific rate is more honest. Is keeping cash really that bad? Cash itself isn’t the problem; idle cash is. A high-yield savings account at roughly the inflation rate keeps purchasing power about flat — the calculator’s “loss” line assumes 0% earnings. Why do retirement calculators talk in “today’s dollars”? Because a 2046 dollar isn’t a 2026 dollar. Stating goals in today’s dollars (as this tool’s second line does) keeps the target human-sized and honest.
Sources: BLS Consumer Price Index (inflation reference), Investor.gov: purchasing power Figures last verified Report a wrong number