Inflation Impact Calculator
See what your money is actually worth after inflation eats away at it.
Analyze real vs nominal returns with CPI-adjusted purchasing power.
How inflation erodes your money
Inflation is like a slow leak in your wallet. Everything costs a little more each year, which means your money buys a little less. $100 in 1990 had the buying power of over $230 today. That's why leaving money in a savings account paying 0.5% when inflation is 3% actually makes you poorer over time.
The solution isn't to panic — it's to invest. Any money you don't need for 5+ years should be working harder than a savings account. Even a low-cost index fund has historically outpaced inflation by several percent per year over long periods.
Purchasing power is calculated as PV = FV / (1+r)^t using compound deflation. Historical CPI values are sourced from Bureau of Labor Statistics annual averages (CPI-U). Real return = ((1 + nominal) / (1 + inflation)) − 1 (Fisher equation). For investment planning, real returns matter more than nominal returns.
The annualized inflation rate between two years is derived as r = (CPI_end / CPI_start)^(1/years) − 1. Total inflation = (CPI_end / CPI_start − 1) × 100. The custom rate override replaces historical CPI data with a user-specified constant rate for scenario analysis.