Inflation Calculator — Purchasing Power Over Time
Calculate how inflation erodes purchasing power over time. See what today's dollars will buy in the future, or what past dollars are worth in today's money.
Historical US average: ~3.2% (1913–2024). Recent 5-year average ~4.5% due to 2021–2023 spike.
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Frequently asked questions
What is the average US inflation rate?
The long-run average US inflation rate (CPI-U) from 1913 to 2024 is approximately 3.2% per year. This varies widely by era: ~8% in the 1970s, ~3% in the 1980s–2000s, ~1–2% in the 2010s, and a spike to ~8% in 2022 before cooling to ~3% in 2024. For long-term financial planning, most advisors use 2.5–3.5% as a baseline assumption.
What causes inflation?
Main drivers include demand-pull inflation (too much money chasing too few goods), cost-push inflation (rising production costs passed to consumers), and built-in inflation (wage-price spirals). The Federal Reserve controls inflation primarily through interest rates — raising rates slows borrowing and spending, cooling price growth. Supply chain disruptions, energy shocks, and fiscal stimulus can all trigger inflation spikes.
How can I protect my savings against inflation?
Common inflation hedges: TIPS (Treasury Inflation-Protected Securities) whose principal adjusts with CPI; I-Bonds (US Savings Bonds with inflation-linked rates, currently capped at $10K/year per person); broad stock index funds (S&P 500 ~10% nominal return historically, ~7% real); real estate and REITs whose values and rents often track or exceed inflation. Holding large amounts in low-yield savings accounts is the biggest inflation risk.