The formula behind the number
Future value = amount × (1 + rate)years. Example: $100 in 2000 grown at 3% average inflation for 26 years is $100 × 1.0326 ≈ $215.66 in 2026 money. Flip it around and $100 of today's money had the buying power of only about $46 back in 2000. Inflation compounds just like investment returns — quietly, relentlessly, in the wrong direction.
Why 3% is the default
U.S. CPI inflation has averaged roughly 3% per year over the past century, though individual years range from deflation to double digits (13.5% in 1980, 8% in 2022, under 2% for much of the 2010s). A flat average smooths those swings, which is fine for long-range planning but will not match official CPI figures for any specific pair of years.
The rule of 72, inverted
Divide 72 by the inflation rate to see how long prices take to double: at 3%, prices double about every 24 years; at 4%, every 18. That's why keeping long-term savings in cash is a slow leak — a dollar under the mattress at 3% inflation loses half its buying power in about a generation, and why retirement math should always be done in inflation-adjusted terms.
How to use this calculator
Enter a dollar amount, the year it applies to, and the year you want to translate it into, then set an inflation rate — 3% for the long-run U.S. average, or your own figure to stress-test a plan. The result is the equivalent buying power, plus a decade-by-decade table. Two practical uses: checking whether a raise or a bond yield actually beats inflation (if it doesn't, it's a real-terms pay cut), and translating a retirement target into today's money so the number means something. For precise historical comparisons between two specific years, the Bureau of Labor Statistics CPI calculator uses actual monthly readings; this tool is for quick estimates and forward-looking planning.