Inflation-Adjusted Value
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What the original amount is worth in the target year
history
Use realistic rates
Long-term average inflation in many developed countries is around 2–3.5%. Higher rates apply during high-inflation periods.
savings
Protect purchasing power
Cash loses value over time. Assets that tend to rise with inflation (equities, property, inflation-linked bonds) help offset the loss.
calculate
Adjust savings goals
When planning for a future expense, inflate the target amount so the goal matches tomorrow’s prices, not today’s.
compare
Compare real returns
Subtract inflation from investment returns to see the real gain in purchasing power, not just the nominal number.