Inflation Impact Calculator
Understand how inflation affects the purchasing power of your money over time
See the real impact of inflation on your savings and plan better for the future by accounting for rising costs.
Calculate Impact
💡 Tip: Adjust the inflation rate to see how different scenarios affect your purchasing power over time.
Understanding Inflation Impact
What is Inflation?
- A general increase in prices and fall in purchasing power
- Erodes the value of money over time
- Essential to consider in long-term financial planning
Why Track Inflation?
- Plan for future expenses accurately
- Ensure your investments beat inflation
- Maintain your standard of living in retirement
How It Works
This calculator uses the compound inflation formula to show how prices increase over time:
FV = PV × (1 + r)^t - • FV = Future Value (amount needed to maintain purchasing power)
- • PV = Present Value (current amount)
- • r = Annual inflation rate
- • t = Time period in years
Beating Inflation
To protect your wealth from inflation, your investments should earn returns higher than the inflation rate:
- Equities: Historically provide returns that beat inflation over the long term
- Real Estate: Property values typically rise with inflation
- Diversification: Spread investments across different asset classes