Inflation Calculator

Understanding Inflation

Inflation is the rate at which the general level of prices for goods and services rises over time. It erodes the purchasing power of money, meaning your money buys less in the future than it does today.

How Inflation Works

If inflation is 3% per year, an item that costs $100 today will cost approximately $103 next year. Over time, this compounds, significantly increasing costs.

Why This Matters

• Savings: Money sitting idle loses value to inflation
• Investments: You need returns that exceed inflation to grow wealth
• Retirement planning: Future expenses will be higher than today's
• Wages: Income should increase with inflation to maintain purchasing power

Disclaimer

This calculator uses the inflation rate you provide as a fixed rate. Historical and future inflation rates vary; actual purchasing power may differ based on actual inflation trends.