Inflation Calculator | Purchasing Power Calculator
Calculate how inflation affects your money's value over time. See the impact of inflation on your purchasing power with our easy-to-use inflation calculator.
Category: Financial
Inflation Calculator
Frequently Asked Questions
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, resulting in a decrease in purchasing power over time. It's typically measured as an annual percentage increase.
How does inflation affect my money?
Inflation erodes the purchasing power of money over time. For example, if the annual inflation rate is 3%, then something that costs $100 today will cost $103 next year, meaning the same amount of money buys less.
What is a good inflation rate to use for calculations?
For long-term planning in the United States, using a rate between 2% and 3% is common, as this aligns with the Federal Reserve's target inflation rate. However, actual inflation rates can vary significantly by time period and region.
How can I protect my money from inflation?
Common strategies include investing in assets that historically outpace inflation (such as stocks, real estate, or TIPS - Treasury Inflation-Protected Securities), diversifying investments, and regularly reviewing and adjusting your financial plan.