Inflation Calculator 2026
Find out what a sum of money in the past is worth today, or what today's money will be worth in the future. Understand the true value of your money.
Understanding Inflation and Its Impact on Your Money
Inflation is the rate at which the general level of prices for goods and services rises, eroding the purchasing power of money.[reference:10] A dollar today buys less than it did in the past — and will buy even less in the future.
How Inflation is Calculated
Inflation is typically measured using the Consumer Price Index (CPI). The formula is: Inflation Rate = (CPI in current year - CPI in base year) / CPI in base year × 100.[reference:11] The CPI tracks the average price change of a basket of goods and services over time, representing typical consumer spending.
Global Inflation Outlook
According to the IMF, global headline inflation is expected to decline from an estimated 4.1% in 2026 to 3.8% in 2026 and further to 3.4% in 2027.[reference:12] The US inflation rate has historically averaged around 3.2% per year.
Why Inflation Matters for Your Finances
Inflation reduces the purchasing power of your savings. If your savings account earns 1% interest but inflation is 3%, your money is effectively losing 2% of its value each year. That's why investing in assets that outpace inflation — like stocks, real estate, or inflation-protected bonds — is crucial for long-term wealth preservation.
Frequently Asked Questions
Inflation is the rate at which the general level of prices for goods and services rises, eroding the purchasing power of money. It means that a dollar today buys less than it did in the past.[reference:13]
Inflation is typically measured using the Consumer Price Index (CPI). The formula is: Inflation Rate = (CPI in current year - CPI in base year) / CPI in base year × 100.
Global headline inflation is expected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027, according to the IMF.
Inflation reduces the purchasing power of your savings. If your savings account earns 1% interest but inflation is 3%, your money is effectively losing 2% of its value each year. That's why investing is important to beat inflation.
Nominal value is the face value of money without adjusting for inflation. Real value is the value adjusted for inflation, reflecting the actual purchasing power of money in today's dollars.