Inflation Calculator
See how compound inflation erodes the purchasing power of your savings and calculate what goods will cost decades into the future.
Your $10,000 will only buy what $5,326 buys today.
What costs $10,000 today will require $18,776 to purchase.
Purchasing Power Half-Life (50% Decay)
Year-by-Year Purchasing Power Schedule:
| Timeline | Remaining Buying Power | Cumulative Value Lost | Equivalent Required Cost |
|---|---|---|---|
| Today (Year 0) | $10,000 | -0.0% | $10,000 |
| Year 2 | $9,389 | -6.1% | $10,650 |
| Year 4 | $8,816 | -11.8% | $11,343 |
| Year 6 | $8,278 | -17.2% | $12,080 |
| Year 8 | $7,773 | -22.3% | $12,866 |
| Year 10 | $7,298 | -27.0% | $13,702 |
| Year 12 | $6,852 | -31.5% | $14,593 |
| Year 14 | $6,434 | -35.7% | $15,542 |
| Year 16 | $6,041 | -39.6% | $16,553 |
| Year 18 | $5,672 | -43.3% | $17,629 |
| Year 20 | $5,326 | -46.7% | $18,776 |
Understanding Inflation & Compounding Purchasing Power
Purchasing Power vs. Replacement Cost
Inflation is two sides of the same coin:
- Purchasing Power Erosion: If your cash stays stuffed under a mattress, its buying power shrinks:
P₀ / (1 + r)ᵗ. - Equivalent Future Price: The nominal sticker price of groceries or housing expands:
P₀ × (1 + r)ᵗ.
The Rule of 72 Half-Life
The classic Rule of 72 provides a rapid mental approximation of when prices double or money loses 50% of its purchasing capacity:
At a 3% inflation rate, purchasing power is halved in 72 / 3 = 24 years. At 6% inflation, it halves in just 12 years.
Protecting Wealth Against Inflation
Cash parked in zero-interest bank accounts guarantees negative real yields after inflation.
Common inflation hedges include Treasury Inflation-Protected Securities (TIPS), broad market equity index funds (which grow earnings with pricing power), and real assets like real estate.