How much money would you need in 20 years to maintain the same purchasing power as today? Assume the annual inflation rate averages 3%. Suppose that you needed $60,000 for your first year of retirement. Use the Inflation Calculator to help you study the impact inflation is likely to have on your finances. Inflation over time does erode the value of money. For instance, $100 that you have today, in 15 years given a three percent inflation rate, would be worth only $64.19. In 15 years, the same item would cost $155.80, or over 50 percent more than today.Īnother way to understand the impact of inflation is to determine the value of today's dollar in the future. For example, an item that costs $100 today would cost $134.39 in ten years given a three percent inflation rate. Just about everything that we buy goes up in price with time.
Even the most financially-wise people wince at the thought of inflation eating away at the purchasing power of their savings and investments. But one factor that no one can control is the constant increase in the price of goods and services caused by inflation. Hopefully, savvy investing along with prudent spending and budgeting will prevent you from draining down your retirement money too quickly. Nurturing your financial nest egg is an important goal for all investors, particularly if you are near retirement or already retired. Inflation Calculator - Save Enough to Account for Inflation
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