💵 Inflation Calculator

Understanding Inflation and Purchasing Power

Inflation is the gradual increase in prices over time, which means your money buys less as years pass. This calculator helps you understand how inflation has affected the purchasing power of money between any two dates. Whether you're comparing prices from decades ago, planning for retirement, or understanding historical financial data, this tool shows you the real value of money adjusted for inflation.

What is Inflation?

Inflation measures how much prices have increased over time. When inflation is 3% annually, something that costs $100 today will cost $103 next year. Over decades, inflation significantly erodes purchasing power - $100 in 1990 has the same buying power as about $240 in 2025.

How This Calculator Works

This calculator uses the U.S. Consumer Price Index (CPI-U), which tracks the average price change for a basket of consumer goods and services. By comparing CPI values between two dates, we can calculate how much prices have changed and adjust dollar amounts accordingly.

• Enter an Amount: The dollar amount you want to adjust
• Choose Dates: Select the "from" date (when the amount was worth that value) and "to" date (today or future date)
• Get Results: See the equivalent purchasing power in today's dollars

Common Use Cases

• Historical Comparisons: "How much would $50,000 in 1980 be worth today?" - Compare salaries, prices, or values across decades
• Retirement Planning: Understand how much you'll need in the future to maintain today's purchasing power
• Salary Negotiations: Compare your salary to historical salaries adjusted for inflation
• Investment Analysis: See the real (inflation-adjusted) returns on investments over time
• Understanding Economic Data: Make sense of historical financial figures in today's context

Historical Inflation Rates

Inflation rates vary significantly over time:

• 1970s-1980s: High inflation (5-14% annually) due to oil crises and economic policies
• 1990s-2000s: Moderate inflation (2-4% annually) with stable economic growth
• 2010s: Low inflation (1-2% annually) following the financial crisis
• 2020s: Variable inflation (2-8% annually) due to pandemic-related economic factors

The Federal Reserve typically targets 2% annual inflation as a sign of healthy economic growth.

Why Inflation Matters

Purchasing Power Erosion: If your savings don't grow faster than inflation, you're losing purchasing power. A $100,000 retirement fund today won't buy as much in 20 years if it doesn't grow.

Investment Planning: When planning investments, consider inflation-adjusted (real) returns, not just nominal returns. A 5% return with 3% inflation is only a 2% real return.

Salary Growth: A 3% annual raise might just keep up with inflation - meaning your purchasing power stays the same, not increases.

Long-Term Planning: For retirement or long-term goals, always account for inflation. What costs $50,000 today might cost $90,000 in 20 years with 3% inflation.

Limitations of CPI

The Consumer Price Index is an average that may not reflect your personal spending. If you spend more on items that have increased faster than average (like healthcare or education), your personal inflation rate may be higher. The calculator provides a general estimate based on average price changes.

Important Notes

This calculator uses historical CPI data from the U.S. Bureau of Labor Statistics. For offline estimates, you can enter a custom annual inflation rate. Results are estimates based on average price changes and may not reflect your personal experience. For precise historical data, the calculator uses official CPI data when available. This tool is for educational and planning purposes.