Need context? Read our investing and compounding guide for assumptions and strategy.
Read the guide| Year | Future Cost | Buying Power of $100 |
|---|
Inflation planning guide
Use this calculator to estimate how inflation changes the future cost of goods and services. The results depend on the inflation rate you assume.
Purchasing power
Inflation reduces how much a fixed amount of money can buy over time.
Rate assumptions
Small changes in the inflation rate can meaningfully affect long-term costs.
Category differences
Some expenses rise faster than others, so use realistic assumptions for your situation.
How to choose a rate
- Use a conservative long-term estimate for planning.
- Model multiple scenarios to understand a range of outcomes.
- Update assumptions if the economic environment shifts.
Inflation and savings
- Savings that do not keep pace with inflation lose real value.
- Long-term plans should consider after-inflation returns.
- Use inflation-aware tools for retirement and education planning.
Where inflation matters most
- Housing, healthcare, and education often drive higher cost growth.
- Short-term expenses may fluctuate more than long-term averages.
- Local inflation can differ from national averages.
Inflation calculator FAQ
What inflation rate should I use?
Use a conservative long-term estimate and test multiple scenarios. Inflation varies by year and by category of spending.
How does inflation affect retirement planning?
Inflation reduces purchasing power over time, so retirement plans should account for higher future costs.
What is the CPI?
The Consumer Price Index (CPI) measures the average change in prices paid by consumers for a basket of goods and services.
Does inflation affect all expenses equally?
No. Different categories like housing, healthcare, and energy can move at different rates over time.