Inflation & Purchasing Power

Inflation is often described as a percentage — 3.2% last year, 8.7% the year before. But percentages are abstract. What people actually want to know is simpler: how much less does my money buy now compared to then? This calculator answers that question directly. Enter any dollar amount and any two years, and it shows you the inflation-adjusted equivalent in today's money — or what a future amount would need to be to match your current purchasing power.

The data comes from the U.S. Bureau of Labor Statistics CPI-U series — the same Consumer Price Index the federal government uses to set Social Security COLA adjustments, adjust tax brackets, and report official inflation figures. Annual averages cover 1913 through 2024, giving you over a century of purchasing power history in a single calculation.

What Purchasing Power Loss Actually Looks Like

The dollar has lost roughly 96% of its purchasing power since 1913 — the year the Federal Reserve was established and the CPI record begins. That means $1 in 1913 had the same buying power as approximately $30 today. More recently: $100,000 in 2000 has the purchasing power of around $57,000 in today's dollars — a loss of nearly half in 24 years.

This matters for anyone holding cash savings, receiving a fixed pension, or planning for retirement. A fixed income that felt comfortable at 65 may cover significantly less at 75 if inflation has run above what you planned for. The same math applies in reverse: if you're negotiating a raise, the inflation-adjusted calculator tells you exactly what percentage increase you need just to stay even — not ahead.

Future Purchasing Power: Running the Calculation Forward

The calculator also runs forward. Set the "from" year as today and the "to" year as a future date, and it projects what a current dollar amount would be worth at a given inflation rate. This is useful for retirement planning: if you need $5,000/month in today's dollars, how much will you need in 20 years at 3% average inflation? The answer — about $9,030 — is the kind of number that changes how people think about savings targets.

The Inflation-Social Security Connection

Social Security benefits receive an annual Cost of Living Adjustment (COLA) based on this same CPI data. In theory, COLA keeps your benefit's purchasing power constant. In practice, the CPI basket used for COLA calculations may not match the spending patterns of retirees — particularly for healthcare and housing, which tend to inflate faster than the general index. This is one reason the timing of your Social Security claim matters more than most people realize.

For informational purposes only — not financial advice. CPI data sourced from the U.S. Bureau of Labor Statistics. Future projections are estimates based on user-entered assumptions and are not guaranteed.

The calculator above uses the official index; these are the questions behind it, with sources.

What is the current US inflation rate?

The Consumer Price Index for All Urban Consumers (CPI-U) rose 3.7% over the twelve months to September 2026, per the Bureau of Labor Statistics release of October 14, 2026; core CPI (excluding food and energy) rose 2.6%. The BLS publishes CPI monthly, usually in the second week, for the previous month. Source: BLS CPI.

How is the CPI calculated?

BLS collects around 80,000 prices a month for a fixed basket of goods and services — housing, food, transport, medical care, recreation, education and more — weighted by what urban households actually spend, based on the Consumer Expenditure Survey. CPI-U covers about 93% of the US population. Each item's price change is weighted and combined into the index; the percentage change in the index is the inflation rate. Shelter is the largest single component at roughly a third of the basket.

What is the difference between CPI-U, CPI-W and PCE?

CPI-U is the headline measure and what this calculator uses. CPI-W covers wage-earning and clerical households only (about 29% of the population) and is the index that sets the Social Security COLA. PCE, the Personal Consumption Expenditures price index from the Bureau of Economic Analysis, is what the Federal Reserve targets at 2%; it weights items differently (less housing, more healthcare) and usually runs a few tenths below CPI. Over long periods the three tell the same story.

How much has the dollar lost since 1913?

A dollar in 1913, the first year of the CPI, had the purchasing power of roughly $32 today — a loss of about 97%. That averages about 3.1% a year, but the path was uneven: double-digit inflation in 1917–1920, 1947 and 1974–1981, deflation in 1921–1922 and 1930–1933, and a long stretch from 1991 to 2020 mostly between 1% and 3%. Enter any two years above to see the exact change.

What was the worst year for inflation?

By annual average CPI-U, 1918 at about 18%, with 1917 and 1920 close behind, during and after the First World War. In living memory the peak was 1980 at 13.5%, the end of the 1970s inflation. The 2022 episode peaked at 9.1% year-over-year in June 2022 and 8.0% for the calendar year — the highest since 1981. The sharpest deflation was 1921 (−10.5%) and 1932 (−9.9%).

Is 2–3% inflation normal?

It is the modern norm by design. The Federal Reserve has formally targeted 2% (on the PCE measure) since 2012, and most of the 1990s and 2010s came in between 1% and 3%. Over the full 1913–2026 record the average is higher, about 3.1%, because the wars and the 1970s pull it up. At 2% prices double roughly every 35 years; at 3% every 23 years; at the 2022 peak rate they would have doubled in eight.

Why does inflation matter for retirement?

Because most retirement income is fixed or only partly indexed. A pension with no COLA loses about a quarter of its purchasing power over ten years at 3% inflation and nearly half over twenty. Social Security is indexed to CPI-W, which is why its COLA matters so much to the claiming decision; the break-even calculator applies it. Cash savings earning less than inflation lose value every year even as the balance grows.