Purchasing Power
US Inflation
Calculator
Fed Target
2.0%
Historic Avg
~3.0%
Find out how inflation erodes the purchasing power of your money over time. Enter any dollar amount, set an annual inflation rate and choose a time period. Switch between future value mode to see what your money will be worth, or past value mode to find what an amount was worth years ago. Based on the compound inflation formula used alongside the Consumer Price Index.
Inflation Details
Adjusted Value
$0
Purchasing Power Lost
$0
Cumulative Inflation
0%
Equivalent Amount
$0
How the inflation calculator works
Start by entering a dollar amount. This can be any sum from $1 to $1,000,000 — a salary, a savings balance, the cost of a purchase or any other figure you want to adjust for inflation.
Next, set the annual inflation rate. The default is 3.0%, which is close to the long-term US historical average. You can adjust this to reflect current conditions, use the Federal Reserve's 2% target, or model higher-inflation scenarios up to 20%.
Choose how many years to project, from 1 to 50. In Future Value mode, the calculator shows what your amount will be worth after that many years of inflation — meaning how much more you would need to buy the same goods and services. In Past Value mode, it shows what your current amount was equivalent to in today's purchasing power that many years ago.
The formula uses compound inflation: for future value, the adjusted amount equals the original multiplied by (1 + rate) raised to the number of years. For past value, it divides instead. Results update instantly as you change any input.
What you need to know about inflation in the US
Inflation is measured primarily through the Consumer Price Index (CPI), published monthly by the Bureau of Labor Statistics. CPI tracks the average change in prices paid by urban consumers for a representative basket of goods and services, including housing, food, transportation, medical care and education.
The Federal Reserve targets a 2% annual inflation rate, using the Personal Consumption Expenditures (PCE) price index as its preferred measure. When inflation runs too high, the Fed raises interest rates to cool spending. When it drops too low, rate cuts are used to stimulate the economy.
Historically, US inflation has averaged around 3.0-3.5% per year since 1913. However, rates fluctuate significantly. The 1970s and early 1980s saw inflation above 10%, driven by oil crises and loose monetary policy. The period from 2010 to 2020 saw unusually low inflation, often below the 2% target. Post-2020 inflation surged before gradually returning closer to target levels.
Understanding inflation is essential for financial planning. Savings accounts earning less than the inflation rate actually lose purchasing power over time. Investments, retirement planning and salary negotiations should all account for inflation to maintain your standard of living. Even at a modest 3% rate, prices roughly double every 24 years.
Beyond CPI, other inflation measures include Core CPI (which excludes volatile food and energy prices), the Producer Price Index (PPI) and the GDP Deflator. Each offers a slightly different view of price changes in the economy.
Frequently asked questions
What is inflation and how does it affect my money?
Inflation is the general increase in prices over time, which reduces the purchasing power of your money. If inflation averages 3% per year, something that costs $100 today would cost about $134 in ten years. Use the inflation calculator above to see exactly how much your dollars could lose in value.
What is the Federal Reserve's target inflation rate?
The Federal Reserve targets a 2% annual inflation rate, measured by the Personal Consumption Expenditures (PCE) price index. This target is considered healthy for economic growth. When inflation runs significantly above or below 2%, the Fed adjusts interest rates to bring it back toward the target.
How do I calculate inflation-adjusted dollars?
To find the future value of money after inflation, multiply the amount by (1 + inflation rate) raised to the number of years. For example, $1,000 at 3% inflation over 10 years equals $1,000 x 1.03^10 = $1,343.92. To find the past value, divide instead of multiply. The calculator above handles both directions instantly.
What is the Consumer Price Index (CPI)?
The Consumer Price Index is a measure of the average change in prices paid by consumers for a basket of goods and services over time. Published monthly by the Bureau of Labor Statistics, CPI is the most widely used gauge of inflation in the United States. It covers categories like housing, food, transportation and medical care.
What has the average US inflation rate been historically?
The average annual US inflation rate has been roughly 3.0-3.5% since 1913, when CPI tracking began. However, rates vary widely by decade. The 1970s saw double-digit inflation above 10%, while the 2010s averaged below 2%. Recent years have seen elevated inflation before trending back toward the Fed's 2% target.
How can I protect my savings from inflation?
Common strategies include investing in assets that historically outpace inflation, such as stocks, real estate and Treasury Inflation-Protected Securities (TIPS). High-yield savings accounts and I Bonds also help. The key is ensuring your money grows faster than the inflation rate, otherwise your purchasing power declines over time.