Inflation Calculator

What inflation does to money

Inflation means prices drift upward over time, so the same amount of money buys a little less each year. This calculator shows both sides of that coin: how much you would need in the future to match today's buying power, and how little today's amount would be worth after years of rising prices. Seeing it in real numbers is often a shock, which is rather the point.

The effect compounds, just like interest, only working against you. A rate that feels trivial year to year adds up to a large loss of value over a decade or two, which is why cash left sitting still quietly shrinks in what it can actually buy.

Two examples

At 5% inflation, something that costs 1,000 today would cost about 1,629 in ten years. Flip it around and 1,000 received in ten years would only buy what roughly 614 buys now. Same note, much less power.

Even a gentle 2% rate bites over time. At 2%, prices rise about 22% over ten years and roughly 49% over twenty. Money under the mattress for twenty years at 2% inflation loses a third of its real value without a single price ever looking alarming.

Why it matters

• Cash earning less than the inflation rate loses real value every year, even as the number in the account stays the same.
• Long-term savings usually need to be invested to grow faster than prices, not just held.
• When planning far ahead, think in today's money, because future totals always look bigger than they will feel.

What is the mistake to avoid?

Judging a future sum by its face value. Half a million in thirty years sounds like plenty until inflation is applied, at which point it may buy what a fraction of it buys today. Always translate long-term figures back into current buying power before you decide whether they are enough.