Inflation Impact Calculator
See how inflation erodes purchasing power and what your money will be worth in the future.
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Frequently Asked Questions
What is inflation and how does it affect savings?
Inflation is the general rise in prices over time, reducing what each dollar can buy. At 3% inflation, $10,000 today has the purchasing power of only $5,537 in 20 years. Cash savings in a low-interest account lose real value every year. This is why investing — earning returns above inflation — is essential for long-term wealth.
What is the historical average inflation rate?
US inflation has averaged about 3.3% annually since 1913. The 2021-2023 inflation surge peaked at 9.1% (June 2022) before cooling. The Fed targets 2% annual inflation. High inflation periods (1970s, 2021-23) dramatically erode fixed incomes and bond returns but can benefit owners of hard assets like real estate.
How do I protect my money from inflation?
Best inflation hedges: equities (stocks historically return 7% real), real estate (rents and values rise with inflation), TIPS (Treasury Inflation-Protected Securities), I-bonds (rate adjusts with CPI), commodities, and REITs. The worst places to hold money during high inflation: cash, fixed-rate bonds, and traditional savings accounts.