Inflation Calculator

Q: What is inflation and how is it measured?

Inflation is the rate at which the general level of prices for goods and services rises over time, reducing purchasing power. The US measures inflation primarily through the Consumer Price Index (CPI), which tracks a 'basket' of goods and services. The Federal Reserve targets 2% annual inflation. Core inflation excludes volatile food and energy prices.

Q: How has inflation affected purchasing power over the past 10 years?

From 2014 to 2024, cumulative US inflation was approximately 32–35%. This means $1,000 in 2014 buys roughly $660–$680 worth of goods in 2024 dollars. The 2021–2023 inflation surge (peaking at 9.1% in June 2022) was the highest since 1981. Use our calculator to compare any dollar amounts across any years.

Q: How does inflation affect my savings and investments?

Inflation erodes the real value of cash savings. At 3% annual inflation, $10,000 in a mattress is worth only $7,374 in real terms after 10 years. To outpace inflation: savings accounts should yield above the inflation rate, bonds should offer real returns above CPI, and equity investments have historically returned ~7% real annually (above inflation). Holding too much cash is an inflation risk.

Q: What is the difference between CPI and PCE inflation?

CPI (Consumer Price Index): measures a fixed basket of goods, widely reported in media, used for Social Security COLA adjustments. PCE (Personal Consumption Expenditures): the Federal Reserve's preferred measure; adjusts for consumer substitution behavior, tends to run 0.2–0.4 percentage points lower than CPI. Both measure the same underlying phenomenon but with different methodologies.

Q: How can I protect my money from inflation?

Inflation hedges include: I-bonds (inflation-linked, current rate tracks CPI + fixed rate), TIPS (Treasury Inflation-Protected Securities), equities (businesses can raise prices with inflation), real estate (property values and rents tend to rise with inflation), and commodities. Avoid keeping large amounts in low-yield savings accounts or long-term fixed-rate bonds during high-inflation periods.

Q: What causes inflation?

Inflation can be demand-pull (too much money chasing too few goods), cost-push (rising production costs passed to consumers), or built-in (wage-price spiral). The 2021–2023 inflation surge combined all three: COVID stimulus increased demand, supply chain disruptions raised costs, and tight labor markets pushed wages higher. Central banks combat inflation by raising interest rates to reduce spending.

Calculate the impact of inflation on purchasing power over time.

Updated October 2026

Inflation Details

Original Amount

$

Start Year

End Year

Avg Annual Inflation Rate

% / year

US historical average: ~3.2% (1913–2025). Core CPI (ex food/energy): ~2.5%.

Purchasing Power

Equivalent Value in 2026$2,268.15

Inflation Summary

Original Amount (2000)

$1,000.00

Equivalent Value (2026)

$2,268.15

Purchasing Power Loss

$1,268.15

Total inflation over 26 years: 126.82%

$1,000.00 in 2000 has the same purchasing power as $2,268.15 in 2026 at 3.2% average inflation.

2026 Data

IRS-Sourced

Free Forever

How It Works

01

Enter the Amount

Input any dollar amount you want to adjust for inflation.

02

Choose Years

Select a start year and end year to compare purchasing power.

03

See the Impact

Find the equivalent value and total purchasing power loss over time.

How Inflation Erodes Purchasing Power

Inflation is the rate at which prices rise over time. Even a modest 3% annual rate means prices double roughly every 24 years (Rule of 72). The formula is straightforward: Equivalent Value = Original Amount × (1 + rate)^years. Understanding inflation helps you plan for retirement, negotiate raises, and evaluate investment returns in real terms.

US Historical Average

Since 1913, US CPI inflation has averaged ~3.2%. The 2021–2023 spike peaked at 9.1% in June 2022. Core CPI (ex food/energy) averages ~2.5%.

Real vs Nominal Returns

A 7% investment return with 3% inflation = 4% real return. When evaluating savings or investment performance, always subtract inflation to see true purchasing power gains.

Inflation-Proof Assets

I Bonds (inflation-linked), TIPS, real estate, equities, and commodities historically outpace inflation over the long run. Cash and fixed-rate bonds lose real value.

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Disclaimer: For informational purposes only. Not tax, legal, or financial advice.