See how inflation erodes the purchasing power of your money — past, present, and future
Enter an amount, the number of years, and an inflation rate (the long-run US average is about 3%). The calculator shows what that amount will be worth in the future — and what a future amount is worth in today's dollars.
"Past → Future" shows how much you'll need later. "Future → Past" shows what that amount was worth earlier.
Inflation is the rate at which the general level of prices for goods and services rises over time, causing purchasing power to fall. The U.S. Bureau of Labor Statistics tracks this through the Consumer Price Index (CPI). Since 1913, the U.S. dollar has lost about 96% of its purchasing power.
| Period | Average Rate | Notes |
|---|---|---|
| 1913-2024 (long-term) | 3.2% | Since CPI tracking began |
| 2022 (peak recent) | 8.0% | Highest since 1981 |
| 2023 | 4.1% | Cooling from 2022 peak |
| 2024 (est.) | ~3.4% | Approaching Fed target |
Future value = amount × (1 + inflation rate)^years. Conversely, future dollars ÷ (1 + inflation rate)^years gives today's purchasing power. This is compound decay — at 3% a year, prices roughly double every 24 years.
$1,000 today at a 3% annual inflation rate will be worth about $1,344 in 10 years — meaning you'd need $1,344 then to buy what $1,000 buys today. Planning retirement income without accounting for this silently cuts purchasing power.
Using the historical average CPI inflation rate of about 3.5%, $1,000 in 1980 would require roughly $3,700 today to have the same purchasing power. Inflation averaged much higher in the 1970s-80s than recent decades.
The Federal Reserve targets 2% annual inflation as healthy for the economy — low enough to preserve purchasing power but high enough to avoid deflation, which can be worse for economies and jobs.
Fixed-rate mortgages are inflation-friendly: your payment stays the same while your income and home value generally rise with inflation. This effectively makes your mortgage "cheaper" over time in real terms.