I found an old savings passbook showing my grandmother’s $5,000 deposit from the 1980s, a fortune then, roughly a used car today. Nobody stole it. Inflation just quietly moved the goalposts for forty years. That passbook is why I run inflation math on every long-term plan: savings targets, salary negotiations, retirement numbers. Nominal dollars lie; purchasing power tells the truth.
The math: future purchasing power = amount ÷ (1 + inflation rate)^years. At 3{e0bed9560a59d6d3feee569f5ae3dad3ee14a646b3fccc2d16becbf099999e03} average inflation, $10,000 today buys what ~$7,440 buys in ten years and ~$5,540 in twenty. Flip it for planning: a $50,000 lifestyle today needs roughly $67,000 of income in ten years just to stand still.
Try it now: open the free tool, runs 100{e0bed9560a59d6d3feee569f5ae3dad3ee14a646b3fccc2d16becbf099999e03} in your browser.
Three uses that changed my decisions: salary offers (a 4{e0bed9560a59d6d3feee569f5ae3dad3ee14a646b3fccc2d16becbf099999e03} raise at 5{e0bed9560a59d6d3feee569f5ae3dad3ee14a646b3fccc2d16becbf099999e03} inflation is a pay cut, say it out loud in negotiations), cash savings (emergency funds excepted, long-term cash at 0{e0bed9560a59d6d3feee569f5ae3dad3ee14a646b3fccc2d16becbf099999e03} while inflation runs 3{e0bed9560a59d6d3feee569f5ae3dad3ee14a646b3fccc2d16becbf099999e03}+ is a guaranteed loss, which reframes investing from ‘risky’ to ‘necessary’), and retirement targets (that old ‘$1M to retire’ figure needs reinflating before you trust it).
Bottom line: convert every long-term dollar figure to purchasing power before you believe it.
Your turn: use the tool free here, no signup, nothing leaves your device.
How do you use Compound Inflation Purchasing Power Calculator?
Open the Compound Inflation Purchasing Power Calculator in your browser (What will money be worth in the future?). Type or paste your input, adjust the options, and copy the result. Everything runs locally on your device with no account and nothing stored, so the three steps below take seconds even for confidential work.
- Enter your numbers into the fields. The result recalculates as you type.
- Switch any unit or option to see the updated answer instantly.
- Copy the result with the copy button, or read the summary beneath it.
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