About the Inflation Calculator
This inflation calculator converts an amount of money from one year into its equivalent in another year using an average annual inflation rate. Enter the amount, the year it is from, the year you want to compare with and the inflation rate, and it tells you what the same basket of goods would cost, how much prices rose in total, and how much buying power the original amount loses.
Use it to plan for future costs (what will $1,000 of groceries cost in 20 years?), to judge whether a salary rise kept up with prices, to set retirement income targets in future dollars, or to go backwards and see what today’s amount would have been worth in an earlier year. Set the target year earlier than the starting year to deflate instead of inflate.
Because it uses a single average rate, the result is a smooth estimate rather than an official index figure. For exact historical US values, the Bureau of Labor Statistics publishes the Consumer Price Index (CPI-U): its annual average rose from 9.9 in 1913 to 321.9 in 2025, an average of about 3.2% a year, while the Federal Reserve targets 2% over the longer run. The default 3% is a round planning assumption, not an official figure for any particular period.
With the default inputs, the equivalent amount in comparison year is $1,343.92. Change any value above to recalculate instantly.
How to use the inflation calculator
- 1Enter the amount of money you want to adjust.
- 2Enter the year the amount is from and the year you want to compare with.
- 3Enter an average inflation rate — about 3% for the long-run US average, 2% for the Fed target.
- 4Read the equivalent amount and the purchasing power lost.
- 5Use the chart to see how the gap widens over time.
Formula and method
Inflation compounds just like interest. If prices rise by an average rate i each year, something that costs A in year Y₁ costs A × (1 + i)^(Y₂ − Y₁) in year Y₂. When Y₂ is earlier than Y₁ the exponent is negative, which deflates the amount back to the earlier year’s prices.
Purchasing power works in the opposite direction: holding the same nominal amount while prices rise means it buys only A ÷ (1 + i)^n of the original goods. Cumulative inflation is (1 + i)^n − 1, and purchasing power lost is 1 − 1 ÷ (1 + i)^n. Using a constant average rate smooths out year-to-year swings in the real price index.
- A
- Starting amount
- i
- Average annual inflation rate as a decimal
- Y₁
- Year the amount is from
- Y₂
- Year to compare with
- n
- Number of years between them
Worked examples
$1,000 from 2016 in 2026 dollars at 3%
Ten years at 3% compound to 1.03¹⁰ = 1.3439, so $1,000 of 2016 spending equals about $1,343.92 in 2026. Put the other way, $1,000 of cash held since 2016 buys only $744 worth of 2016 goods — a 25.6% loss of purchasing power.
Future cost: $50,000 of expenses in 20 years at 2.5%
At 2.5% inflation, prices rise 63.9% over 20 years, so a lifestyle costing $50,000 today would cost about $81,931 in 2046. Retirement income goals set in today’s dollars need to be scaled up by this factor.
Going back: $100 today in year-2000 dollars at 4%
Moving 26 years backwards divides by 1.04²⁶ ≈ 2.77, so $100 in 2026 had the same buying power as about $36.07 in 2000 at a 4% average inflation rate.
Frequently asked questions
How is inflation calculated?+
Inflation is the percentage change in a price index — in the US usually the Consumer Price Index (CPI-U) published monthly by the Bureau of Labor Statistics. Over several years the yearly rates compound, so cumulative inflation is larger than the sum of the yearly rates.
What inflation rate should I use for planning?+
Many planners use 2.5%–3% for long-range projections. The Federal Reserve targets 2% a year over time, while CPI-U inflation from 1913 to 2025 averaged about 3.2% a year. Use a higher rate to stress-test your plan.
What is purchasing power?+
Purchasing power is how much goods and services a sum of money can buy. When prices rise 25%, a fixed $1,000 buys only as much as $800 did before — a 20% loss in purchasing power, not 25%.
How do I protect my savings from inflation?+
Keep long-term money invested in assets that have historically outpaced inflation, such as diversified stocks, and consider inflation-linked bonds like TIPS or US I bonds. Cash in a savings account loses purchasing power whenever its after-tax rate is below inflation.
Why does this differ from the official CPI calculator?+
This calculator applies one average rate every year, while the BLS CPI calculator uses the actual index values, which rose unevenly — for example, much faster in 2021–2022. Enter a rate that matches your period for a closer match.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.