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