The Complete Guide to Inflation and Buying Power
By Arshi Khan, Founder of Just4Marketing · Last reviewed October 2026
Inflation means the same money buys a little less each year. Over a long period, even a modest rate makes a large difference — to what a future purchase will cost, to how much a savings balance is really worth, and to how much you'll need in retirement. This guide explains how to project prices and buying power with an inflation rate you choose.
The two questions this calculator answers
Future cost: how much will something that costs a given amount today cost in a number of years? Buying power: what will a fixed amount of money be worth, in today's terms, after that time?
Both use the same factor, (1 + rate)years — one multiplies by it and the other divides.
$1,000 at 3% inflation
| After | Same goods will cost | $1,000 buys (in today's money) |
|---|---|---|
| 10 years | $1,343.92 | $744.09 |
| 20 years | $1,806.11 | $553.68 |
| 30 years | $2,427.26 | $411.99 |
For planning, this is why retirement targets look so large: income worth $100,000 today would need to be about $209,000 a year in 25 years to buy the same things at 3% inflation.
Doubling times
| Inflation rate | Prices double in |
|---|---|
| 2% | 35.0 years |
| 3% | 23.4 years |
| 4% | 17.7 years |
| 6% | 11.9 years |
Using inflation in your plans
Compare returns after inflation
A real return is roughly your return minus inflation. 7% growth with 3% inflation is about 4% in real terms.
Check raises against inflation
A pay raise below the inflation rate is a cut in what your pay can buy.
Test more than one rate
Plans that work at 2% and still hold up at 4% are much safer than plans built on one guess.
Frequently asked questions
How do I calculate the effect of inflation?
Future cost = today's cost × (1 + inflation rate)^years. Buying power = amount ÷ (1 + inflation rate)^years. At 3% a year, something costing $1,000 today costs about $1,343.92 in 10 years, and $1,000 kept as cash buys only about $744.09 worth of today's goods.
What inflation rate should I use?
Use a long-run average that fits your plans. Many central banks, including the US Federal Reserve, target about 2% a year, and long-term averages have often been around 3%. Inflation changes year to year, so it's worth testing a few rates. This calculator doesn't use live inflation data — you enter the rate.
How long does it take for prices to double?
Divide 70 by the inflation rate for a quick estimate (the rule of 70). At 3%, prices double in about 23 years; at 6%, in about 12. The calculator shows the exact figure.
How does inflation affect my savings?
If your savings earn less interest than the inflation rate, their real value falls even as the balance grows. A savings rate of 2% with 3% inflation loses about 1% of buying power a year.