Free Inflation Calculator 2026 - Purchasing Power Calculator & Money Value Over Time
Calculate how inflation affects the value of money over time with our free inflation calculator. See purchasing power changes, compare prices across years, and understand the impact of inflation on your savings and retirement planning.
The amount of money you want to analyze
Average annual inflation rate. Historical average is 2-3% per year.
Note: This calculator provides estimates based on a constant inflation rate. Actual inflation rates vary from year to year. For historical inflation data, visit theBureau of Labor Statistics.
How Does Inflation Affect Purchasing Power? Complete Guide 2026
What is Inflation? Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. When inflation occurs, each unit of currency buys fewer goods and services. For example, if inflation is 3% per year, an item that costs $100 today will cost $103 next year.
Purchasing Power: Purchasing power refers to the value of money in terms of the goods and services it can buy. As inflation increases, purchasing power decreases. Our inflation calculator shows you exactly how much purchasing power is lost over time due to inflation.
How to Calculate Inflation Impact: To calculate how inflation affects money value over time, use the formula: Future Value = Present Value × (1 + Inflation Rate)^Years. Our calculator does this automatically and shows you both the future value and the purchasing power impact.
Why Inflation Matters for Retirement Planning: Inflation is a critical factor in retirement planning because it erodes the purchasing power of your savings over time. If you're planning to retire in 30 years, you need to account for inflation when calculating how much you'll need. For example, if you need $50,000 per year today, with 3% inflation, you'll need about $121,000 per year in 30 years to maintain the same purchasing power. Use our retirement savings goal calculator to plan for inflation.
Historical Inflation Rates: The average inflation rate in the United States has been around 2-3% per year over the long term. However, inflation can vary significantly. The Federal Reserve targets 2% inflation as optimal for economic growth. Historical data shows periods of high inflation (like the 1970s) and low inflation (like recent years).
Official Sources: For historical inflation data and current inflation rates, visit theBureau of Labor Statistics Consumer Price Index and theFederal Reserve.
Frequently Asked Questions - Inflation Calculator
Inflation reduces purchasing power over time. As prices increase, the same amount of money buys fewer goods and services. For example, with 3% annual inflation, $100 today will only have the purchasing power of about $97 next year. Over 10 years, $100 would have the purchasing power of about $74. Our inflation calculator shows you exactly how inflation affects the value of money over any time period.
To calculate purchasing power, divide the original amount by (1 + inflation rate) raised to the power of the number of years. For example, to find the purchasing power of $100 after 10 years at 3% inflation: $100 / (1.03)^10 = $74. Our inflation calculator does this automatically, showing you how much money from a future year would be worth in today's dollars, accounting for inflation.
The average inflation rate in the United States has been around 2-3% per year over the long term. However, inflation can vary significantly from year to year. The Federal Reserve targets 2% inflation as optimal for economic growth. Historical data shows periods of high inflation (1970s-1980s) and low inflation (recent years). Our calculator lets you input any inflation rate to see its impact.
Inflation is critical for retirement planning because it erodes the purchasing power of your savings over time. If you're planning to retire in 30 years, you need to account for inflation when calculating how much you'll need. For example, if you need $50,000 per year today, with 3% inflation, you'll need about $121,000 per year in 30 years to maintain the same purchasing power. This is why it's important to invest your retirement savings in assets that outpace inflation.
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