Impact of Inflation

Over Time, What Is the Long-Term Impact of Inflation?

Over time, the effects of inflation can erode the value of your savings. At the end of an inflationary year, a dollar buys a little bit less than the year before. This calculator is designed to estimate the future cost of an item based on today’s prices and the rate of inflation you expect.

The results below show the projected future cost based on the time frame you selected and the rate of inflation you expect over that period. How will you stay ahead of inflation? There are strategies you can implement to help your savings and investments keep pace with inflation over the long term.

Your Results
Description	Amount
The current cost of what you want to buy:	$0.00
How many years before you will buy this item:	0.00 years
Annual inflation rate that you want to assume:	0%
The future cost based on the information you entered:	$0.00

The graph below illustrates the incremental year-by-year increase in prices based on the factors you input. Even at relatively low rates of inflation, the cost of goods and services can rise dramatically over time. For example, assuming 4 percent inflation, the value of $1 would be cut in half every 18 years. That means if you are currently 30 years old, prices will have quadrupled by the time you reach retirement age, assuming 4 percent annual inflation.

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Impact of Inflation

Over Time, What Is the Long-Term Impact of Inflation?

According to the Bureau of Labor Statistics, inflation has averaged about 2.5 % over the past 10 years.