How does inflation affect my savings?

Inflation reduces the purchasing power of your money. If the inflation rate is 3% and your savings account only pays 1% interest, you are effectively losing 2% of your 'real' wealth every year.

What is a 'normal' inflation rate?

Most central banks (like the US Federal Reserve) target an inflation rate of approximately 2% per year as a sign of a healthy, growing economy.

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Finance

Inflation Calculator - Buying Power Tracker

See how the value of money has changed over time. Calculate the future buying power of your savings based on inflation rates.

Inflation is the 'invisible tax' that reduces the purchasing power of your money over time. As prices for goods and services rise, each dollar, euro, or pound you own buys a smaller percentage of a product. Understanding this concept is vital for long-term saving and retirement planning; $1,000 today will not have the same value in 20 years. Our Inflation Calculator helps you project this change, showing you what a specific amount of money will be 'worth' in the future based on a projected annual inflation rate.

Amount today

Inflation rate (% / year) (%)

Years

Currency

Future value

€134.39

Total cost increase: €34.39 (3% inflation over 10 years)

Amount today€100.00

Inflation rate (% / year)3%

Years10

How it Works

The tool uses the compound interest formula to calculate the future cost of an item. It multiplies the current amount by (1 + inflation rate) raised to the power of the number of years.

Calculation Formula

Future Value = Present Value × (1 + Rate)^Years

Calculation Examples

1. **Long Term**: $100 today at 3% inflation will require **$180.61** in 20 years to have the same buying power.

Why use this tool in your daily life?

Protect your future wealth. This tool is a critical reality check for long-term savers, helping you adjust your investment returns to ensure your future lifestyle isn't eroded by the rising cost of living.