Inflation is the quiet tax on cash. At 3% a year, money loses roughly a quarter of its purchasing power over a decade. This calculator shows both sides: what today’s amount will actually buy in future, and how large a future amount must be to feel the same as today.
Most developed-market central banks target around 2%. Using 2.5–3% for long-range planning builds in a small margin without being alarmist.
If the account pays 2% and inflation runs at 3%, the real return is negative 1%. The balance grows in nominal terms while buying less each year.
Divide 70 by the inflation rate. At 3% purchasing power halves in about 23 years; at 7% it halves in ten.
Often not. Headline indices track a national basket. If your spending skews toward rent, childcare, or energy, your personal rate can run well above the published figure.
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