Inflation Adjustment Calculator

This inflation adjustment calculator applies the compound inflation formula to project the future cost of a given amount or, equivalently, to calculate the present purchasing power of a future sum, using the compound interest formula: future value = present value × (1 + inflation rate)^years, which can be rearranged to solve for present value as well. It captures the idea that each year prices tend to rise, meaning a fixed amount of money buys fewer goods and services over time. The calculator defaults to a 3% annual inflation rate reflecting the US long-run historical average, though recent decades have seen significant deviations (over 9% in 2022). Use this calculator to understand how much you need to save or earn in the future to maintain your current standard of living, to adjust historical prices for comparison purposes, or to assess whether an investment return truly outpaces inflation. Key limitations include the assumption of a constant inflation rate over the projection period (when in reality rates fluctuate year-to-year), no accounting for variable inflation across different spending categories ( Healthcare costs often rise faster than general inflation), and the fact that tax treatment of investment gains may mean your real after-tax return is lower than the nominal return minus inflation.