Purposeful FIRE📉Inflation Impact Calculator
See what today's spending will cost in future dollars, and how much purchasing power inflation quietly erodes over a 20-30 year retirement. Inflation is the invisible tax on every fixed income.
Your Numbers
Your Results
| Year | Future Cost | Today's $ Worth |
|---|---|---|
| Year 1 | $72,100 | $67,961 |
| Year 4 | $78,786 | $62,194 |
| Year 7 | $86,091 | $56,916 |
| Year 10 | $94,074 | $52,087 |
| Year 13 | $102,797 | $47,667 |
| Year 16 | $112,329 | $43,622 |
| Year 19 | $122,745 | $39,920 |
| Year 22 | $134,127 | $36,532 |
| Year 25 | $146,564 | $33,432 |
| Year 28 | $160,155 | $30,595 |
| Year 30 | $169,908 | $28,839 |
What Is Inflation Impact?
Inflation is the silent tax on every fixed income and every dollar of savings. A retiree spending $70,000 per year today who experiences 3% annual inflation will need $113,000 in 15 years just to maintain the same lifestyle. If their income doesn't grow to match, they are quietly becoming poorer each year even if their portfolio balance stays constant.
This calculator shows two related but distinct effects: what today's spending will cost in future dollars (the future cost), and what today's dollars will actually be worth in the future (purchasing power). Both figures matter: the first tells you how much income you'll need, the second tells you how much your savings erode in real terms if they don't outpace inflation.
How This Calculator Works
Future cost is calculated as your present amount multiplied by (1 + inflation rate) raised to the number of years. Purchasing power of today's dollars in the future is the inverse: $1 divided by (1 + inflation rate) to the same power. The calculator shows both, year by year, in a table.
Personal Considerations
Inflation is hard to visualize because it operates slowly and invisibly. The year-by-year table in this calculator is specifically designed to make the cumulative effect concrete. Seeing that $70,000 today becomes $113,000 in year 15 is more emotionally persuasive than reading that '3% compounded for 15 years equals a 56% increase.'
One useful planning exercise is to run this calculator with healthcare inflation (5-6%) on just the healthcare portion of your budget, and standard inflation on the rest. The combined effect on total spending over a 25-year retirement is often significantly higher than a single 3% assumption, and planning for it early is much easier than discovering it mid-retirement.
If what you're feeling goes beyond what a calculator can help with, licensed clinicians are available at SanaNetwork.com, a referral network founded by this site's founder, Dr. Yoendry Torres.
Frequently Asked Questions
For a balanced long-run assumption, 3% is reasonable. If you want to be conservative, use 3.5-4%. For healthcare-heavy spending plans, model healthcare expenses separately at 5-6%. Avoid using very low rates like 2% for long horizons; the difference between 2% and 3% compounded over 30 years is large.
A stock-heavy portfolio has historically outpaced inflation over long periods. I-Bonds and TIPS are US government securities explicitly linked to the CPI inflation index. Cash and fixed-rate bonds do not outpace inflation over time and lose purchasing power in real terms.
It shows what a dollar earned today will actually buy in each future year. If $1 today is worth $0.64 in year 15 at 3% inflation, it means the same basket of goods that costs $1 today will cost $1.56 in year 15, and your dollar only covers $0.64 worth of that basket.
Yes. Social Security benefits receive annual Cost of Living Adjustments (COLAs) tied to the CPI-W inflation index. In recent high-inflation years (2022-2023), SS beneficiaries received 8.7% and 3.2% COLAs respectively. This is one of the most valuable inflation-protection features of Social Security, particularly for long-lived retirees.