Inflation calculator

Use future value = present value × (1 + annual rate)^years. Example: $1,000 in 2000 at an average 2.5% inflation over 25 years equals $1,000 × 1.025^25 ≈ $1,854 in today's value. Enter two years and an amount, and this calculator shows the conversion in both directions instantly.

For a past span, take the CPI-U index level published by the Bureau of Labor Statistics for both years and compute the geometric mean: (end index ÷ start index)^(1/years) − 1. That is more accurate than averaging the published yearly rates, each of which is rounded. For a forward-looking estimate, the Federal Reserve's stated longer-run goal is 2% inflation, so 2% is the usual base case, and running 2%, 2.5%, and 3% as a range is more honest than betting on a single number. Avoid extrapolating one unusual year: the 2021–22 surge and the near-zero readings of the mid-2010s both look nothing like the long-run average. Whichever rate you choose, keep it consistent with the inflation assumption you use in your investment-return planning, or you will end up double-counting.

Inflation compounds — each year's price level multiplies the previous year's. The arithmetic mean overstates this, so the accurate single-rate equivalent of 'X% per year on average' is the geometric mean. Example: the geometric mean of +10% and −10% is about −0.5%, matching the actual cumulative result.

The Bureau of Labor Statistics publishes the Consumer Price Index monthly at bls.gov, and the CPI-U series for All Urban Consumers is the one normally used to adjust dollar amounts. Annual averages are the mean of that year's twelve monthly index values. Note that three different price measures get quoted for three different purposes: the Federal Reserve targets the PCE price index from the Bureau of Economic Analysis, which usually runs a few tenths below CPI because of differences in weighting and coverage, so a 2% PCE goal is not the same thing as 2% CPI. Social Security's annual cost-of-living adjustment uses a third variant, CPI-W. For long spans, work from index levels rather than chaining published yearly percentages, since each of those is rounded before publication.

Far more than the long-run average suggests, which is exactly why a single-rate model needs care. US inflation ran in double digits at the start of the 1980s, briefly turned negative in 2009 during the financial crisis — the first annual decline in decades — sat close to 1–2% through much of the 2010s, then surged in 2021–22 to the fastest pace since the early 1980s before cooling again. Any one of those years, used alone, would badly distort a 25-year conversion. That is the case for taking the geometric mean across your whole span, and for treating a forward-looking assumption as a range rather than a point. This tool applies one constant rate, so it draws a smooth curve where reality was jagged — fine for a purchasing-power question, where only the endpoints matter, but not a description of the path.

No one can know future inflation. The Federal Reserve's stated longer-run goal is 2%, which makes 2% a reasonable base case, and comparing 2%, 2.5%, and 3% gives you a range instead of false precision. Over long historical spans US inflation has averaged meaningfully more than 2% — the 1970s and early 1980s pull the average up — so for a 30-year horizon many planners deliberately use 2.5–3% to stay conservative. This is a conversion tool that takes your assumption as input, not a forecast, so the useful discipline is to run a conservative, a base, and a high case and then see how much your conclusion actually depends on the rate you picked.

Nominal value is the future number as shown; real value is its purchasing power in today's money. Example: $100,000 in 30 years with 2.5% annual inflation is worth about $47,670 in today's purchasing power. A rising nominal amount can still lose real value, so view both together.

Your real wage falls. Example: if prices rise 3% but your salary rises only 1%, real purchasing power drops about 2%. Even with a higher nominal salary, your effective standard of living can decline. Enter your current salary and expected inflation to see the real value a few years out.

No. It measures purchasing power inside a single currency, so every figure is in dollars from start to finish. A weaker dollar raises what you pay for imported goods, foreign travel, and anything priced abroad, and it does eventually feed into CPI through import prices — but it is a separate variable this conversion does not model, and a year when the dollar drops sharply can leave you feeling poorer overseas even with tame domestic inflation. If you hold foreign assets, currency moves also change their dollar value independently of inflation; that is a return question, not a purchasing-power one. Worth knowing for taxes: gains are measured in nominal dollars, so the IRS taxes the full nominal gain on a long-held asset even though part of it is only inflation.

Living costs 30 years from now can more than double today's amount. At 2.5% annual inflation, prices are about 2.1× higher in 30 years. To maintain a $3,000/month lifestyle 30 years out, you'd need about $6,300/month. The FIRE calculator builds this inflation into your target assets.