Inflation Calculator

Inflation compounds every year, like investment returns but in reverse: it shrinks what each dollar can buy. At 3%, prices rise about 34% over 10 years and 81% over 20 years, even if your bank balance never changes.

It's how much prices go up by. For example, at 3% inflation over 24 years the multiplier is 2.0, so prices double and your money buys half as much.

At 3% average inflation, $100 kept as cash will buy roughly what $74-$78 buys today after 10 years (the exact figure depends on the rate, this calculator computes it precisely for any amount and horizon). The mechanics are simple compounding in reverse: each year prices rise by the inflation rate, so the same note buys a little less, and the losses compound. That is also why the damage accelerates: the second decade of holding cash destroys more buying power than the first. The practical takeaway is not to avoid cash entirely, you need an emergency fund, but to size cash holdings to actual near-term needs and put long-horizon money in assets whose expected return exceeds inflation. Run your own amount below to see the year-by-year erosion.

For planning horizons of 10+ years, use your country's long-run average rather than today's headline rate, this calculator's default of 3% is based on the long-run trailing average for your selected region, sourced from the national statistics agency (see the Data Sources page). Headline inflation is volatile: a spike year like 2022 or an unusually low year would both mislead a 25-year plan. Two refinements are worth considering. If your spending is concentrated in fast-rising categories, healthcare, education, rent in a major city, your personal inflation rate may run 1-2 points above the official basket, and the Personal Inflation calculator can estimate it. And for goals priced in another country (foreign university fees, for example), use that country's inflation rate for that goal, not your home rate.