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Inflation calculator
See how much your money loses to inflation over time. Free calculator showing future vs today's purchasing power.
Why inflation is the silent tax on savers
Every dollar sitting as cash loses value every year. At 3% average inflation, $100 today buys what $55 buys in 20 years. You didn't spend it, nothing was stolen, but your purchasing power is cut nearly in half.
What $10,000 becomes over time
- 10 years at 3%: $10,000 → needs $13,440 to buy same stuff
- 20 years at 3%: → needs $18,060
- 30 years at 3%: → needs $24,270
- 30 years at 5%: → needs $43,220
Historical US inflation rates
- 1950s: 2.0% average
- 1970s: 7.1% average (high inflation decade)
- 1990s: 3.0% average
- 2010-2019: 1.8% average (low)
- 2021-2023: 6-9% peak
- Long-run US average since 1913: ~3.1%
How to protect money from inflation
Best historical performers (real returns, inflation-adjusted):
- Stocks (S&P 500): ~7% real return. Best inflation hedge over 20+ year periods.
- Real estate: ~3-4% real return. Also provides rental income and leverage.
- TIPS (Treasury Inflation-Protected Securities): directly indexed to CPI. Safe, modest returns.
- I-Bonds: US savings bonds with rate tied to inflation. $10,000/year purchase limit.
- Gold: inconsistent. Good over 40-year periods, terrible over decades like 1980-2000.
Bad inflation hedges:
- Cash in checking: loses at full inflation rate
- Low-yield savings (under 2%): loses 1-2% real every year
- Fixed-rate bonds held long: locked into pre-inflation rates
The emergency fund exception
Your emergency fund (3-6 months of expenses) should stay in high-yield savings or money market, not invested. Yes, it loses ~1-2% real per year. But the whole point is same-day access. Don't optimize the emergency fund for inflation — optimize for availability.
FAQ
What is the average inflation rate?+
US long-run average is ~3%. Fed target is 2%. Use 2.5-3% for long-term planning.
How much does $10k lose in 20 years?+
At 3% inflation, $10k has the purchasing power of $5,540 after 20 years. You've lost ~45% of real value.
How do I protect money from inflation?+
Stocks (7% real return), real estate, TIPS, I-Bonds. Cash loses. Keep emergency fund in savings (stability matters more than inflation-matching).