Why use this calculator
Money only means something next to the prices it faces. A salary, a house price, a court award or a grandparent's first wage is meaningless until it is restated in dollars you recognise, and inflation quietly does the restating whether or not you notice. This calculator does both halves of the job at once.
It tells you how many end-year dollars are needed to match a start-year amount, and it tells you what an unchanged pile of cash still buys after the same period, which is the number that explains why holding savings in a non-interest account is a slow loss rather than a safe choice.
It is set up for the United States and the US Consumer Price Index published by the Bureau of Labor Statistics, but the arithmetic is the same anywhere. Use it to sanity-check a raise, a rent increase, a long-term savings goal or a historical comparison before you repeat the figure to somebody else.
How to use it
- Enter the amount you want to convert and treat it as being measured in the start year.
- Set the start year to the year that amount belongs to, which might be the year a price was quoted, a salary was agreed or a contract was signed.
- Set the end year to the year you want the figure restated in; it defaults to the current year, 2026.
- Enter the average annual inflation rate across the period, remembering that this is a single average rather than any one year's figure, and that the long-run US average sits close to 3% while the Federal Reserve targets 2%.
- You may set the end year earlier than the start year to run the conversion backwards in time, and you may enter a negative rate to model deflation.
What each result means
- Starting amount
- The sum you entered, treated as being measured in start-year dollars before any adjustment is applied.
- Years spanned
- The number of years between the two dates, which is the exponent applied to the annual inflation rate.
- Value in end-year dollars
- How much end-year money is needed to buy what the starting amount bought in the start year. This is the headline conversion.
- Prices double every
- How many years it takes for prices to double at the average inflation rate you entered, which is also how long it takes cash under the mattress to lose half its buying power.
- Purchasing power in start-year dollars
- The mirror figure: what the same nominal cash, held unchanged, actually buys once measured in start-year prices.
- Total price change
- The cumulative rise or fall in the price level across the whole period, not the annual rate.
- Price multiplier
- The single number to multiply any start-year price by in order to restate it in end-year dollars.
- Purchasing power retained
- The share of the original buying power that uninvested cash still holds at the end of the period.
- Average annual inflation applied
- The rate used in the calculation, repeated so you can see exactly which assumption produced these figures.
The formula
Value in end-year dollars = Amount multiplied by (1 + r) raised to the power n
- r
- the average annual inflation rate expressed as a decimal
- n
- the end year minus the start year
Purchasing power in start-year dollars is the reciprocal, Amount divided by (1 + r) to the power n. The price multiplier is (1 + r) to the power n and the total price change is that multiplier minus one, expressed as a percentage. When n is negative the same expression runs the conversion backwards, and when r is negative it models deflation.
How this number is used in practice
The most useful thing this calculator does is make a pay rise honest. If prices rose 3% and your salary rose 2%, you took a real pay cut of roughly one percent even though the number on your contract went up. Run your old salary from last year into this year at the prevailing rate and compare it against your new salary: the gap is your real change.
The same test applies to a rent increase, a pension indexation clause and a long-term contract with a fixed fee, which quietly loses value every year it runs without an escalation clause.
The second use is long-range planning. A retirement target of one million dollars is a different proposition depending on when you reach it. At 3% inflation, money halves in purchasing power roughly every twenty-four years, so a million dollars thirty years away buys about what four hundred thousand buys today.
Any savings or retirement projection you take seriously should be restated in today's dollars before you decide whether the number is enough, which is exactly the conversion this page performs.
It is also the right tool for historical arguments. Before you claim that a house, a car or a university degree used to cost a fraction of today's price, convert the old figure properly. Some things really have outrun general inflation, notably housing, healthcare and tuition, while others such as clothing, electronics and air travel have fallen in real terms.
The general rate is only a starting point, and the Bureau of Labor Statistics publishes category indices when the detail matters.
Worked examples
$100 from 2000 restated in 2026 dollars at 3% average inflation
You would need $215.66 in 2026, and $100 of 2026 money buys only what $46.37 bought in 2000.
A $60,000 salary from 2016 restated in 2026 dollars at 3.5%
It takes $84,635.93 in 2026 to match it, a total price change of 41.06%.
$500,000 projected forward from 2026 to 2056 at the Federal Reserve's 2% target
It becomes $905,680.79 in 2056 dollars, so the same cash retains 55.21% of its buying power.
When people use it
- Checking whether a pay rise actually beat inflation or was a real-terms cut
- Restating a retirement or savings target in today's dollars before judging whether it is enough
- Comparing a historical price, salary or award against current money
- Setting an escalation clause in a multi-year contract or lease
- Working out the real return on a savings account after inflation is taken out
Tips
- The long-run US average is close to 3% a year, while the Federal Reserve targets 2%. Use 2% to 3% for long projections and the actual CPI series for history.
- The rule of 72 works on inflation too: at 3%, prices double in about 24 years and money halves in the same time.
- General CPI understates housing, healthcare and tuition and overstates electronics and clothing. Use category indices when the item matters.
- A savings account paying less than inflation is losing money in real terms even though the balance is rising.
- Always restate long-range goals in today's dollars before deciding they are sufficient, or you will plan against a number you cannot interpret.
- For legal settlements, indexation clauses and back pay, use the published CPI series rather than an average, because the compounding of individual years differs from a flat rate.
What it assumes, and where it stops being accurate
- A single average annual rate is applied to every year. Real inflation is lumpy, and compounding actual yearly figures gives a slightly different answer.
- The general consumer price index is assumed to represent your spending. Your personal inflation rate depends on your rent, health cover, fuel use and childcare.
- No tax is modelled. Nominal interest and nominal capital gains are taxed even when they only keep pace with prices.
- Wages, pensions and benefits are not assumed to be indexed. Where indexation exists it may lag prices by a year or use a different index.
- Currency conversion is not applied. The calculation is a single-currency price-level adjustment, not an exchange rate comparison.
Terms used on this page
- Consumer Price Index
- The Bureau of Labor Statistics measure of the average change in prices paid by urban consumers for a fixed basket of goods and services.
- Purchasing power
- The quantity of real goods and services a fixed amount of money can buy, which falls as prices rise.
- Real versus nominal
- Nominal figures are the raw dollar amounts; real figures have been adjusted so that different years can be compared fairly.
- Deflation
- A sustained fall in the general price level, which raises the purchasing power of cash and the real burden of debt.
Questions people ask
- What inflation rate should I enter?
- For long-term planning use 2% to 3%. The Federal Reserve's stated long-run objective is 2%, while the realised US average over many decades is closer to 3%. For a historical conversion, look up the actual Consumer Price Index values for the two years on the Bureau of Labor Statistics site and divide one by the other, which is more accurate than any single average.
- Why does the calculator show two different figures?
- Because there are two honest questions. The first is how many end-year dollars are needed to match a start-year amount, which is the amount multiplied by the price multiplier. The second is what the same cash still buys if it was never invested, which is the amount divided by that multiplier. They are reciprocals of each other and both are useful, but confusing them is the most common mistake in inflation arithmetic.
- Can this calculator handle deflation?
- Yes. Enter a negative average annual rate and the multiplier falls below one, meaning a given amount buys more at the end of the period than at the start. You can also set the end year earlier than the start year, which runs the same conversion backwards in time. Sustained deflation is rare in the modern United States but did occur in the 1930s.
- Is my personal inflation rate the same as the headline figure?
- Almost certainly not. The Consumer Price Index weights a representative basket, so your own rate depends on how much of your budget goes to rent, health insurance, fuel, childcare and food. Renters in tight housing markets and households with heavy medical costs typically experience higher inflation than the headline; households with paid-off homes often experience less.
- Does inflation reduce the real cost of my mortgage?
- Yes, for a fixed-rate loan. The repayment is fixed in nominal dollars while wages and prices generally rise, so the payment shrinks as a share of your income every year. That is one reason long fixed-rate borrowing has historically favoured the borrower during inflationary periods, and it does not apply to variable-rate debt, where the rate usually rises with inflation.
- Should I restate my retirement target in today's dollars?
- Always. A target set in future nominal dollars is impossible to judge, because you have no feel for what those dollars buy. Convert the projected balance back to today's money using your assumed inflation rate, then compare it against your current annual spending. If the projection cannot support your present lifestyle, the plan needs changing regardless of how large the nominal figure looks.
Use this with
Inflation Calculator answers one part of the question. These pick up where it stops: Compound Interest Calculator, Retirement Savings Calculator, Savings Goal Calculator and Investment Return Calculator.
Where these figures come from
Figures and rules on this page follow United States federal rules.
- U.S. Bureau of Labor Statistics: Consumer Price Index. Official measure of consumer price inflation
- Board of Governors of the Federal Reserve System. Monetary policy and the 2% long-run inflation objective
- U.S. Bureau of Labor Statistics. Wage, earnings and price statistics
Inflation Calculator produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.