See what an amount will cost in the future and how inflation erodes its purchasing power.
What costs $1,000 today will cost about $1,344 in the future at this rate. Estimates only — not financial advice. Verify with your lender/advisor.
An inflation calculator shows what an amount of money today will cost in the future as prices rise, and how much buying power that same amount loses over time at a given annual inflation rate.
Future cost = amount x (1 + rate/100)^years, where rate is the annual inflation rate and years is the time horizon. For example, $1,000 at 3% inflation for 10 years grows to about $1,344. Estimates only, not financial advice.
Purchasing power is how much a fixed amount of money can actually buy. Inflation reduces it because prices rise over time. The future purchasing power of today's amount is amount / (1 + rate/100)^years, so at 3% for 10 years $1,000 buys only about $744 worth of goods.
Long-run U.S. inflation has averaged roughly 2 to 3 percent per year, and many planners use that range. You can enter any rate you expect. Actual inflation varies year to year, so treat the result as an estimate, not financial advice.