Inflation Calculator

Because it works slowly, every year, for as long as you live, and a fixed payment has no way to respond. A market decline is visible and usually recovers. Inflation is invisible in any one year and never gives back what it takes. At 3% a year, prices roughly double in 24 years, which is a normal retirement for a couple in their mid-sixties.

During a career, raises tend to track prices. After retirement, income comes from three kinds of sources, and inflation treats them very differently. Social Security adjusts every January. Most pensions from private employers, fixed immediate annuities and bond interest do not adjust at all. A portfolio of stocks and other real assets can grow faster than prices over time, but only if you are not forced to sell in a bad year to cover a shortfall that inflation created.

The risk rises with longevity. The longer you live, the more years of compounding the price level has had, and the later years are also when healthcare and help at home cost the most. A plan that looks comfortable at 66 can be tight at 86 without any change in spending habits, only in prices.

The calculator above shows the effect in both directions. Past Inflation tells you what an amount from a given year equals now, useful for judging how far your pension or your savings have already slipped. Future Projection shows what a fixed amount will be worth, or what today's spending will cost, in any future year at the rate you choose.

Roughly half of what it buys today after 20 to 25 years at ordinary inflation rates. The table shows the purchasing power, in today's dollars, of a fixed $4,000 monthly pension or annuity payment.

Take a hypothetical retiree, Margaret, who retires at 66 with a $4,000 monthly pension from a former employer that has no cost-of-living adjustment. At 3% inflation, when she is 86 the same check buys what $2,215 buys today. If she lives to 96, it buys what $1,648 does. Nothing about the pension changed; the loss is entirely in prices.

The same arithmetic applies to a fixed immediate annuity, the interest on a CD or bond ladder, and rental income under a long fixed lease. It also applies to cash. $100,000 held in a savings account that pays less than inflation loses buying power every year, even though the balance never falls.

Social Security is the one large income source most retirees have that adjusts for prices every year. Benefits rise each January by the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next. For 2026 the adjustment is 2.8% (SSA, 2025).

Put Margaret's two income sources side by side. Her Social Security benefit is $3,000 a month and her pension $4,000. If inflation averages 3% and the COLA matches it, after 25 years the Social Security check has grown to about $6,280 and still buys what $3,000 buys today. The pension still pays $4,000, which buys what $1,910 does. Her guaranteed income started at $7,000 in today's dollars and ends near $4,910.

The COLA is not a perfect match for a retiree's costs. The CPI-W reflects the spending of working households, and retirees spend a larger share on healthcare and housing. Medicare Part B premiums, which are usually deducted from the Social Security payment, rose from $185.00 a month in 2025 to $202.90 in 2026, about 9.7%, against a 2.8% COLA (CMS, 2025). Higher-income retirees also pay IRMAA surcharges on top of that; see Medicare enrollment and IRMAA.

The practical consequence: the larger your Social Security benefit relative to fixed income, the better protected you are. That is one of the strongest arguments for delaying a claim, particularly for the higher earner in a couple, whose benefit becomes the survivor benefit. See when to claim Social Security.

Use 3% as a base case and test 4%. Consumer prices rose 3.4% in the 12 months to August 2026, and 2.4% excluding food and energy (Bureau of Labor Statistics, 2026). Four years earlier the 12-month rate reached 9.1%, the highest since 1981 (BLS, 2022). A 25-year plan will almost certainly include stretches above its average.

Your own inflation rate may differ from the official one. Retiree budgets tend to carry more of the categories that have risen quickly: health insurance and out-of-pocket care, homeowners insurance, property tax, home repairs and services you now pay someone else to do. They carry less of what has become cheaper, such as electronics. Two ways to account for this:

• Run the calculator twice. Once at 3% for general spending, once at a higher rate for healthcare and insurance, then add the results.
• Look back at your own records. Use Past Inflation with a start year when you have good spending records, and compare the result with what you actually spend now.

Small differences in the assumption matter over long periods. $100,000 of annual spending grows to about $164,000 in 20 years at 2.5%, $181,000 at 3%, and $199,000 at 3.5%. After 30 years the range is roughly $210,000 to $281,000.

By holding more income that rises with prices, and enough growth assets to make up what fixed income loses. No single tool does the whole job, so most retirees combine several.

Through thresholds that are fixed in dollars. The federal tax brackets and standard deduction are adjusted for inflation each year, but several lines that matter to retirees are not.

• Taxation of Social Security. Benefits start to become taxable above $25,000 of combined income for single filers and $32,000 for married couples. Those amounts were set in 1983 and have never been indexed, so a growing share of beneficiaries pays tax on benefits (SSA).
• Net investment income tax. The 3.8% surtax applies above $200,000 of modified adjusted gross income for single filers and $250,000 for married couples filing jointly. These thresholds are not indexed either (IRS).
• Capital gains on long-held assets. Tax is due on the nominal gain, including the part that only reflects inflation. A property bought decades ago can show a large taxable gain with little real increase in value.

Required minimum distributions add to the pressure. They begin at age 73, or 75 if born in 1960 or later, and grow as a share of the account each year. Converting part of a traditional IRA to a Roth in low-income years before then can reduce future taxable income; see Roth conversions before RMDs.

Nearly half of a dollar's buying power since 2000. The annual-average Consumer Price Index rose from 172.2 in 2000 to 321.943 in 2025, an 87% increase and about 2.5% a year compounded (BLS). Past Inflation uses those index values directly: it multiplies your amount by the end-year index divided by the start-year index, so the result compounds each year's actual change rather than an assumed average.

The calculator opens on that case. $60,000 of spending in 2000 takes about $112,175 to match in 2025. Read the other way, a fixed pension of $3,000 a month that began in 2000 now buys what about $1,605 bought then. If you retired in the early 2000s on an income that has not risen since, that is the loss you are living with, and it arrived without any change in the check.

The pace is uneven, which is why a single average can mislead. From 2019 to 2025 the index rose about 26%, and the annual average for 2022 was 8.0% above 2021. A retiree who met that stretch in the first years of retirement took a permanent step down in real income from any fixed source. Look at the Rate column in the year-by-year table to see which years did the damage in your own span.

Run it once for each income source that does not adjust for inflation, then compare the total with your spending in the same future year.

1. Choose Future Projection and set the end year to when the younger spouse turns 90 or 95.
2. Enter a year of fixed pension or annuity income and an inflation rate of 3%. The purchasing power lost is the amount other sources must eventually replace.
3. Enter your current annual spending to see what the same lifestyle will cost in that year.
4. Repeat at 4% to see how sensitive the plan is.

If the gap is large, the usual responses are to delay Social Security, keep a larger share of the portfolio in assets that can grow, or buy some inflation-linked income. The Retirement Withdrawal Calculator shows how the gap affects the life of the portfolio, and how much you need to retire covers the full calculation.

Past results use annual-average CPI-U index values for 1970 to 2025 from the Bureau of Labor Statistics; the Excel template carries the same table on its CPI Data sheet. Figures on this page are illustrations, not advice for your situation.