Finance Tools
What It Does
Calculates how inflation affects the purchasing power of money over time. Use Forward mode to see what today’s money will buy in the future, or Backward mode to find out what a past amount is worth in today’s dollars. Includes a year-by-year schedule and a rate comparison table for eight common inflation rates. Supports 46 currencies for formatted monetary displays.
How to Use It
- Enter the starting amount.
- Set the annual inflation rate (default 3%).
- Choose the time period in years.
- Select a direction: Forward (today → future) or Backward (past → today).
- Select your currency from the dropdown (defaults to USD).
- Click “Calculate” to see the adjusted value, year-by-year breakdown, and rate sensitivity comparison.
- Use “Copy Results” to copy the summary to your clipboard, “Export CSV” or “Export Excel” to download the analysis, or “Clear” to reset all fields.
Options Explained
| Option | Description |
|---|---|
| Amount | The starting monetary amount you want to evaluate against inflation |
| Annual inflation rate | The average yearly inflation rate, expressed as a percentage. The long-term US average is approximately 3% |
| Time period | The number of years to project. Must be a whole number between 1 and 100 |
| Direction | Forward shows what today’s money will buy in the future (values decrease). Backward shows what a past amount is worth today (values increase) |
| Currency | The currency for all monetary values — affects the symbol shown on amounts. Does not perform any conversion |
| Export CSV | Downloads a .csv file with the summary, year-by-year schedule, and sensitivity table — ideal for spreadsheets or data analysis |
| Export Excel | Downloads an .xlsx file with the same data formatted for Microsoft Excel or compatible applications |
About Inflation
Inflation is the rate at which the general level of prices for goods and services rises over time, eroding the purchasing power of money. Even moderate inflation compounds significantly over the years — a 3% annual rate reduces today’s dollar to about $0.74 in purchasing power after just a decade.
Use the Forward direction to project how much your current savings will actually buy in the future, and the Backward direction to understand the present-day value of amounts from the past. The sensitivity table lets you compare outcomes across eight common inflation rates at a glance.
Understanding inflation is essential for setting savings goals, evaluating investment returns in real terms, and planning for retirement. Export the year-by-year schedule to a spreadsheet for deeper analysis.
Common Use Cases
- Projecting the future purchasing power of current savings
- Adjusting historical prices to present-day equivalents
- Setting salary negotiation targets that outpace inflation
- Evaluating whether investment returns beat inflation in real terms
- Planning retirement income needs decades into the future
- Comparing inflation scenarios across different rate assumptions
What Is Inflation?
Inflation is the sustained increase in the general price level of goods and services over time, measured as an annual percentage. Central banks typically target around 2% inflation as a sign of a healthy economy. When inflation is higher, the purchasing power of each dollar declines faster — meaning you need more money in the future to buy the same things you can buy today. The Consumer Price Index (CPI) is the most common measure, tracking the average price change of a basket of consumer goods. Understanding inflation is fundamental to financial planning because it affects savings, investments, wages, and retirement needs.
Frequently Asked Questions
How does inflation affect my savings?
If your savings earn less interest than the inflation rate, your money loses purchasing power over time. A savings account earning 2% during 4% inflation effectively loses 2% in real value each year.
What is the difference between CPI and core inflation?
CPI measures the overall price change for a basket of goods including food and energy. Core inflation excludes these volatile categories to show the underlying trend, which central banks often monitor more closely for policy decisions.
Should I use nominal or real returns for planning?
Real returns (adjusted for inflation) give a more accurate picture of actual wealth growth. When planning long-term goals like retirement, using real returns prevents overestimating future purchasing power.