Inflation Calculator
Free inflation calculator. See what a dollar from any past year is worth today, or estimate the future cost of any item at a given inflation rate.
Quick answer
Future value = present value × (1 + inflation rate)^years. Past value = present ÷ (1 + rate)^years. The U.S. long-run average is about 3.2% (1913-2023), but the post-COVID period saw 6-9% before settling back to 3-4%. Always state your assumed rate explicitly.
Inflation Calculator
Future buying power
How it works
Future value = present × (1 + rate)^years. Real (today's-dollars) value = present ÷ (1 + rate)^years. The 3% default is roughly the long-run US average since 1990, but recent years have run higher.
When to use it
Sanity-checking a retirement target ("$1M in 30 years sounds like a lot... but is it?"), evaluating whether a fixed pension keeps pace, or pricing a contract that locks in today's rate for years.
Common mistakes
Using "average" inflation for short windows. Inflation is volatile year to year — 2021-2023 ran 5-9% while 2014-2020 ran 1-2%. For periods under 10 years, look up the actual CPI from the BLS instead of guessing.
How the inflation calculator works
Inflation compounds the same way investment returns do — geometrically, not additively. To find what a dollar from year X is worth today, multiply by (1 + average annual inflation)^(today − X). To go forward, do the same operation forward in time. The U.S. long-run average from 1913 to 2023 is 3.2%, but the rate varies dramatically: high single digits during the 1970s and post-COVID, low single digits during most other periods. The 'right' rate depends on what timeframe you care about — for nominal vs. real conversions over 20+ years, use 2.5-3.5%; for projecting next year, use the most recent CPI-U print.
When to use it
Negotiating a salary that hasn't kept pace with COL. Comparing historical wages, prices, or media spending to today (was that $5 movie ticket in 1965 a deal?). Projecting future costs for retirement, college, or large purchases. Planning whether to lock in a long-term contract at a fixed price (the seller is betting on inflation; you should have an opinion on whether they're right).
Common mistakes
- Adding instead of compounding. 3% inflation for 30 years is not 90% — it's 143% (the dollar loses about 59% of its purchasing power).
- Using a single nationwide rate for personal expenses. Healthcare and education have inflated 5-7% per year; tech goods have deflated. Your personal inflation rate depends on your spending mix.
- Comparing nominal investment returns to inflation rates. A 7% nominal return at 3% inflation is a 4% real return — much smaller than the headline number suggests.
Frequently asked questions
How is inflation calculated?
The Bureau of Labor Statistics tracks the price of a fixed basket of goods over time (the Consumer Price Index, or CPI). The annual inflation rate is the percent change in CPI from one year to the next. The most-cited figure is CPI-U (urban consumers).
What is the average rate of inflation in the U.S.?
About 3.2% per year averaged from 1913 to 2023. The Federal Reserve targets 2% over the long run. Specific decades vary widely — the 1970s averaged 7%, the 2010s averaged 1.8%, and 2021-2023 saw 6-9% before easing.
How much will $100,000 be worth in 30 years?
At a 3% annual inflation rate, $100,000 today would have the purchasing power of about $41,200 in 30 years. To maintain the same purchasing power in 30 years, you'd need about $242,700 in nominal dollars. Compounding works against your savings — and that's why investing matters.