Inflation Calculator - What is that in Today's Dollars?
Understand the real purchasing power of your future retirement savings. See how inflation impacts the true value of money over time.
How to Use This Calculator
- • Enter the future dollar amount you expect to have (e.g., retirement savings goal)
- • Specify how many years from now you'll receive this money
- • Adjust the inflation rate assumption (default is 3.5% annually)
- • See the real purchasing power in today's dollars
- • Compare optimistic, realistic, and pessimistic scenarios
🔒 Your Privacy Protected: For your security, we do not store any of your financial information. All calculations are performed in your browser and cleared when you close it.
What is that in Today's Dollars?
Enter a future dollar amount to see its real buying power in today's money, after accounting for inflation.
A Necessary Reality Check
Even though the numbers from this calculator can seem depressing, understanding the reality of inflation is one of the most important steps in successful long-term planning. This tool is designed to provide that realistic perspective.
The Core Principle of Growth
The goal is to educate you on a core financial principle: for your savings to truly grow, their rate of return must consistently be higher than the rate of inflation.
The Danger of Playing It "Too Safe"
This is why you can't just hang out in low-growth funds—like the G Fund or the more conservative L Funds (e.g., L Income)—when you get close to or at retirement and think your money will last. If your returns don't beat inflation, your purchasing power is shrinking, and you are effectively losing money over time. Even if you do not withdraw a dime.
Understanding Inflation's Impact on Your Retirement
Why This Matters for Federal Employees: When planning your FERS retirement, understanding inflation is crucial. Your TSP savings goal might look impressive, but its actual purchasing power could be significantly less.
TSP Fund Considerations: The G Fund, while safe from market volatility, often barely keeps pace with inflation. Over long periods, this "safe" choice can actually result in loss of purchasing power.
Balanced Approach: Consider diversifying across TSP funds that historically beat inflation. The C, S, and I funds, while more volatile, have historically provided returns that exceed inflation over long periods.
COLA Protection: Your FERS annuity includes Cost of Living Adjustments (COLAs), but these often lag behind actual inflation. Don't rely solely on COLAs to maintain your standard of living.
Planning Tip: When setting retirement savings goals, always account for inflation. A million dollars might sound like a lot today, but as this calculator shows, its future purchasing power could be much less.