Inflation Calculator

Inflation reduces the real value of money over time. At 3% annual inflation, $1,000 today has the purchasing power of about $744 in 10 years and $554 in 20 years. Conversely, $100 in 1990 had the buying power of about $245 in 2024. The calculator converts amounts forward or backward across any time period using historical CPI or your assumed rate.

Long-run US inflation has averaged about 3.1% per year since 1913 (when CPI tracking began). Recent decades have been lower - about 2.5% from 1990–2019 - but inflation surged to a 40-year high of 9.1% in mid-2022 before easing back to 2%–3% by 2024. The Federal Reserve targets 2% long-term inflation.

CPI (Consumer Price Index) is the most-cited measure of inflation in the US, tracking a basket of goods and services typical urban consumers buy. The annual percent change in CPI is what most people mean by "the inflation rate." Other measures (PCE, core CPI excluding food/energy) tell different parts of the story.

Hold assets that historically outpace inflation: stocks (real return ~7% over decades), real estate, TIPS (Treasury Inflation-Protected Securities), and I Bonds (which adjust to CPI). Cash savings yielding less than the inflation rate lose real value. With high-yield savings now around 4%–5% and inflation around 2%–3%, cash earns a modest real return - but stocks and real assets remain better long-term inflation hedges.