Inflation Calculator
Compare dollar amounts across years. Calculate historical purchasing power or project how inflation erodes value over time.
2000 → 2026
| Rate | In 10 years | In 20 years | In 30 years |
|---|---|---|---|
| 2% | $121.90 | $148.59 | $181.14 |
| 3% | $134.39 | $180.61 | $242.73 |
| 5% | $162.89 | $265.33 | $432.19 |
| 7% | $196.72 | $386.97 | $761.23 |
| 10% | $259.37 | $672.75 | $1,744.94 |
What inflation actually means
Inflation is the rate at which prices of goods and services rise over time, reducing the purchasing power of money. The official US measure is the Consumer Price Index (CPI), tracked by the Bureau of Labor Statistics. CPI follows a basket of typical household purchases (food, housing, transport, healthcare, education, etc.).
When people say “inflation was 3% last year,” they mean the CPI rose 3% — meaning $100 of typical purchases last year now costs $103 to buy the same stuff. Wages, savings, and investments need to keep pace just to stand still in real terms.
Historical US inflation rates by decade
- 1970s: 7.4% average. Oil shocks, stagflation. The era that gave inflation its bad reputation.
- 1980s: 5.5% average. Falling from peak after Volcker raised rates. Settled by mid-decade.
- 1990s: 3.0% average. Stable, moderate.
- 2000s: 2.6% average. Despite housing bubble + crisis at the end.
- 2010s: 1.8% average. Lower than Fed target most of the decade.
- 2020s so far: ~4–5% average — driven by COVID supply shocks and recovery; settling toward 2–3%.
- Long-term US average (1913–present): ~3%.
The compounding power of inflation
Inflation works just like investment returns — it compounds. 3% per year for 30 years = 142% total inflation, not 90%. Translation: $100 in 1995 has the same buying power as ~$200 in 2025.
Quick mental shortcut: divide 72 by inflation rate to get the years for prices to double. At 2%: ~36 years. At 3%: ~24 years. At 5%: ~14 years. At 7%: ~10 years.
Real vs nominal: the most important distinction
Nominal: the actual dollar amount on a paycheck, price tag, or account balance.
Real: nominal adjusted for inflation, often expressed in some baseline year's dollars.
A $50,000 salary in 2000 is the same real purchasing power as ~$94,000 in 2026. If your nominal salary went from $50K to $80K over that period, you actually lost real purchasing power despite the “raise.” This is why “wage stagnation” is a real concern even with rising paychecks.
How to protect against inflation
- Stocks (long-term): historically beat inflation by ~7% per year on average. Best long-term inflation hedge.
- Real estate: tends to track inflation, sometimes faster. Plus rent income adjusts upward over time.
- TIPS (Treasury Inflation-Protected Securities): principal adjusts with CPI. Designed specifically as inflation hedge. Lower yields than nominal Treasuries in normal times.
- I Bonds: interest rate adjusts with inflation. Up to $10K/year per person purchase limit.
- High-yield savings accounts: 4–5% in 2026, sometimes beats inflation, sometimes doesn't. Variable.
- Gold and commodities: imperfect inflation hedges; volatile. Often used as portfolio diversifier rather than core holding.
What doesn't protect: cash under the mattress, low-yield savings accounts, cash-equivalent bonds, and fixed annuities.
Inflation in retirement planning
Retirement plans must account for inflation, or they'll fail. A retiree spending $50K/year today needs ~$90K/year in 20 years (3% inflation) just to maintain the same lifestyle. Social Security payments adjust for inflation (COLA); private pensions usually don't.
The 4% safe withdrawal rule (Trinity Study) explicitly assumes annual COLA adjustments to withdrawals. The portfolio needs to grow real, not just nominal — otherwise the real-spending power of withdrawals erodes year by year.
Hyperinflation and historical extremes
For context, some historical extremes:
- Weimar Germany (1923): prices doubled every ~3 days at peak. Cash literally became wallpaper.
- Hungary (1945–46): highest documented inflation ever. Prices doubled every ~15 hours.
- Zimbabwe (2008): peaked at ~80 billion percent monthly inflation.
- Venezuela (2018–19): hit 1.7 million percent annual inflation.
US inflation has never hit hyperinflation territory. Worst sustained period was 13–14% in 1979–80 — bad, but not hyperinflation. The calculator handles any rate you enter, but for normal retirement planning, 2–4% is the relevant range.
Pair with retirement tools
Use this with our Investment Calculator to see real (inflation-adjusted) future portfolio value, the 401(k) Calculator for retirement projection, and the Compound Interest Calculatorfor the underlying compounding math that drives both inflation and investment returns.