Translate future dollars into today's purchasing power — the adjustment most plans skip.
Buying power in 20 years
$55,368
What $100,000 will feel like at 3% inflation.
At 3% annual inflation, prices roughly double every 24 years. Money sitting still loses 45% of its purchasing power over your horizon. To buy in 20 years what $100,000 buys today, you would need $180,611.
A 4.50% return taxed at 24% leaves 3.42%, which beats 3% inflation by 0.42%. After 20 years you would hold $197,986, worth $109,620 in today's terms — a genuine gain of $9,620 in purchasing power.
Interest and short-term gains are taxed as ordinary income. Holding this money in a Roth IRA, HSA or 401(k) would preserve the full 4.50%, turning your 0.42% real return into 1.50%. For long-horizon money, the account type frequently matters more than the investment choice.
Compare account typesMoney needed within three years belongs in cash, where inflation's bite over that period is small and certainty matters. Money not needed for a decade or more belongs invested, where growth can outpace inflation — a 3% rate erodes 45% of value across your 20-year horizon, which is far more damage than a market downturn typically inflicts on a long-term investor.
If you have a retirement target in mind, check whether it was set in today's dollars or future ones. A $1,000,000 goal in 20 years buys what $553,676 buys today — which is a materially different retirement.
Retirement calculatorWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A typical long-horizon comparison showing how much purchasing power erodes even at moderate inflation.
Buying power in 20 years
$55,368
At 3% annual inflation, prices roughly double every 24 years. Money sitting still loses 45% of its purchasing power over your horizon. To buy in 20 years what $100,000 buys today, you would need $180,611.
A 4.50% return taxed at 24% leaves 3.42%, which beats 3% inflation by 0.42%. After 20 years you would hold $197,986, worth $109,620 in today's terms — a genuine gain of $9,620 in purchasing power.
Interest and short-term gains are taxed as ordinary income. Holding this money in a Roth IRA, HSA or 401(k) would preserve the full 4.50%, turning your 0.42% real return into 1.50%. For long-horizon money, the account type frequently matters more than the investment choice.
Compare account typesMoney earning below the inflation rate, where the nominal balance grows while real value shrinks.
Buying power in 15 years
$32,093
At 3% annual inflation, prices roughly double every 24 years. Money sitting still loses 36% of its purchasing power over your horizon. To buy in 15 years what $50,000 buys today, you would need $77,898.
A 0.50% return taxed at 24% leaves 0.38% after tax, which is below 3% inflation. After 15 years you would hold $52,932 nominally, worth $33,975 in today's money — less than the $50,000 you started with. This is the specific trap of holding long-term money in cash.
Interest and short-term gains are taxed as ordinary income. Holding this money in a Roth IRA, HSA or 401(k) would preserve the full 0.50%, turning your -2.62% real return into -2.50%. For long-horizon money, the account type frequently matters more than the investment choice.
Compare account typesLong-horizon money with no tax drag, where real returns compound meaningfully above inflation.
Buying power in 30 years
$41,199
At 3% annual inflation, prices roughly double every 24 years. Money sitting still loses 59% of its purchasing power over your horizon. To buy in 30 years what $100,000 buys today, you would need $242,726.
A 7% return taxed at 0% leaves 7%, which beats 3% inflation by 4%. After 30 years you would hold $811,650, worth $334,389 in today's terms — a genuine gain of $234,389 in purchasing power.
Money needed within three years belongs in cash, where inflation's bite over that period is small and certainty matters. Money not needed for a decade or more belongs invested, where growth can outpace inflation — a 3% rate erodes 59% of value across your 30-year horizon, which is far more damage than a market downturn typically inflicts on a long-term investor.
Inflation does not appear on a statement. Your balance never goes down because of it, which is exactly why it is easy to ignore — the damage shows up in what the balance buys, not in the balance itself.
At 3% a year, prices double roughly every 24 years. Someone retiring today with $80,000 of annual spending will need about $145,000 twenty years into retirement to maintain the same standard of living. A retirement plan built on today's expenses without that adjustment is not conservative; it is simply wrong.
Equities have historically been the most reliable long-run inflation hedge, because companies raise prices along with everything else and earnings grow nominally. Real estate behaves similarly, and a fixed-rate mortgage is itself an inflation hedge — you repay a fixed nominal debt with progressively cheaper dollars.
Cash and nominal bonds are the most exposed. Treasury Inflation-Protected Securities adjust principal with the consumer price index, and Series I savings bonds pay a rate that resets with inflation, making both explicit hedges for money that must stay safe. Gold's record as an inflation hedge is far weaker than its reputation over any horizon shorter than several decades.
A $1 million goal thirty years out buys roughly what $412,000 buys today at 3% inflation.
Cash is safe against volatility and unsafe against inflation. Over decades the second risk is larger.
Wage growth has periods of lagging inflation. Real income can fall while nominal income rises.
Any comparison of costs across decades is meaningless without converting to constant dollars.
A pension without a cost-of-living adjustment loses roughly half its value over a 24-year retirement.
Three percent is the standard long-run planning assumption for the US and sits close to the historical average. If your spending skews toward healthcare or education, which have inflated faster, consider 3.5–4%. Using a lower figure because recent inflation has been mild is how long-range plans quietly under-provide.
It raises the target substantially. If you need $80,000 a year today and retire in 20 years, you will need roughly $145,000 in that first year at 3% inflation — and more every year after. This is why retirement withdrawal strategies build in annual inflation increases rather than holding the withdrawal flat.
Sometimes, barely, and rarely after tax. A 4.5% APY at a 24% marginal rate nets about 3.4%, which roughly matches 3% inflation and leaves a real return near zero. Savings accounts are for preserving money you need soon, not growing money you need later — that is a different job requiring a different asset.
Inflation measures how prices change over time. Cost of living measures how prices differ between places. Both matter but they are separate adjustments — moving from a low-cost to a high-cost metro can raise your expenses more in one move than a decade of inflation would.
The next calculations that usually follow this one.
See the balance, the split between contributions and growth, and what it actually buys.
Find your target, see the gap, and check whether you are leaving employer money behind.
Your savings rate sets the date far more than your income does. This shows the year.
Work backwards from the number you need to the monthly amount that gets you there.
Your headline return is not your return. See what survives fees, taxes and inflation.
Guides that explain the decisions behind these numbers.
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