What will your money be worth in 20 years? Inflation math

Future cost    = Amount × (1 + inflation rate)^Years
Present value  = Amount ÷ (1 + inflation rate)^Years

“What will my money be worth in 20 years?” is really a compound-interest question running in reverse. This page gives you the two formulas, a table for $100,000 over 10 to 40 years, the source of the 3% default, and the one recent stretch that shows why that default is an average, not a promise.

Inflation is compounding working against you

Compound interest is usually presented as the force that grows your portfolio. Inflation is the same exponential machinery pointed the other way: each year’s price increase applies to prices that already include every previous increase. A 3% rise on top of a 3% rise is not 6% — it’s 6.09%, and the gap widens every year.

That’s why the damage looks mild over five years and severe over thirty. Nothing about inflation accelerates; the compounding just has more years to work with. The rule of 72 gives you the half-life: at 3% inflation, prices double — and purchasing power halves — in about 72 ÷ 3 = 24 years. The exact math agrees: $100 × 1.03²⁴ = $203.28.

The two formulas, plus the loss percentage

Everything an inflation calculator does reduces to three lines:

futureCost(amount, rate, years)   = amount × (1 + rate)^years
presentValue(amount, rate, years) = amount ÷ (1 + rate)^years
purchasingPowerLoss(rate, years)  = 1 − 1 ÷ (1 + rate)^years

The first answers “what will today’s $X cost in N years?” The second answers “what is a future $X worth in today’s dollars?” They are exact inverses: inflate an amount forward 20 years and discount it back 20 years at the same rate, and you get the original figure to the cent.

The third line is the loss expressed as a percentage. At 3% over 20 years: 1 − 1 ÷ 1.03²⁰ = 44.6%. Note that it’s not simply 3% × 20 = 60% — and not in your favor here, because the loss compounds toward 100% but never linearly.

What $100,000 today looks like over 10–40 years

All rows assume a constant 3% annual inflation rate.

Read the middle column as the honest answer to “what will my money be worth”: cash that sits uninvested for 30 years keeps barely 41% of its purchasing power. The first column is the planning view — if your household spends $100,000 a year now, the same lifestyle runs about $242,726 a year three decades out.

Run your own amount, rate, and horizon below. The math runs entirely in your browser; nothing you type is sent anywhere.

Prefer the full page? The standalone inflation calculator is the same tool with a year-by-year table, easier to bookmark.

Where the 3% default comes from

The default isn’t arbitrary. Take the Bureau of Labor Statistics CPI-U series — the standard US consumer-price index — and compute the geometric mean of its annual averages from 1926 through 2025. It comes out to roughly 2.97% per year, which rounds to the 3.0% this site uses.

The geometric mean matters: averaging inflation arithmetically overstates the compounded result, the same way a +50% year followed by a −50% year doesn’t average to zero. The geometric mean is the single constant rate that reproduces the actual century of price growth.

The caveat: 2021–2023

A century-long average smooths over violent stretches. The most recent one: CPI-U annual averages rose 4.7% in 2021, 8.0% in 2022, and 4.1% in 2023 (BLS). Compounded, that’s 1.047 × 1.080 × 1.041 ≈ 1.177 — prices up about 17.7% in three years, roughly five and a half years of 3% inflation compressed into three.

The lesson isn’t that 3% is wrong; over long horizons it has been a reasonable central estimate. The lesson is that it’s an average, not a ceiling. If you want margin in a plan, rerun the numbers at 3.5% or 4% and see how much the picture moves.

Why FIRE math uses real returns instead

Long-horizon retirement planning has two mathematically equivalent options: model nominal investment returns and inflate every future expense with the formulas above, or subtract inflation from returns once and work in real (today’s-dollar) terms throughout.

FIRE math almost always takes the second path. A “7% real return” assumption (roughly 10% nominal minus 3% inflation) means every output — your FIRE number, your projected portfolio — already reads in today’s purchasing power. No mental conversion of a 2056 dollar figure, and one fewer assumption that can drift. That’s the convention behind how to calculate your FIRE number and the Standard FIRE calculator: enter expenses in today’s dollars, use real returns, and the inflation adjustment is already done.

The formulas on this page are for everything that convention doesn’t cover — sanity-checking a pension fixed in nominal dollars, a salary that hasn’t moved in five years, or the cash portion of a portfolio quietly losing 3% a year.

Go deeper:

• Inflation calculator — the standalone tool: future cost, present value, and a year-by-year table.
• Compound interest calculator — the same exponential math working for you instead of against you.
• How to Calculate Your FIRE Number — where real-return convention fits into retirement math.
• Standard FIRE Calculator — project your timeline to financial independence in today’s dollars.

Educational content, not financial advice. Historical inflation figures are BLS CPI-U annual averages through 2025; past inflation does not determine future rates.