Inflation Impact on Savings Calculator

Inflation impact on savings: calculate your future value in today’s money

This calculator is for one primary decision: checking whether your savings are keeping up with inflation over a chosen time period. A balance can grow in nominal terms and still lose purchasing power if prices rise faster than your interest rate. That gap is easy to miss because bank statements show only nominal money, not what that money will buy later.

Enter your current savings balance, your time horizon in years, and an expected annual inflation rate. The calculator converts your future balance into “today’s money” by removing the effect of inflation. If you also enter an expected interest rate and monthly contributions, it estimates how your savings may grow while still showing what the result is worth after inflation.

The key output is the inflation-adjusted value (also called the real value). If your inflation-adjusted value is lower than your starting balance, your savings are losing purchasing power over the period. If it is higher, you are gaining purchasing power. The calculator also shows a simple real interest rate estimate so you can see whether your nominal interest rate is actually positive after inflation.

Assumptions and how to use this calculator

• Interest is compounded monthly using the annual interest rate you provide. If you leave interest blank, it is treated as 0%.
• Inflation is applied annually to convert future money into today’s money using an inflation factor of (1 + inflation) raised to the number of years.
• Monthly contributions (if provided) are assumed to occur at the end of each month and earn interest from that point forward.
• Taxes, fees, account limits, and changing rates are ignored. This is a planning estimate, not a bank quote.
• Rates are assumed to stay constant across the full period. If your reality changes, rerun the calculator with updated inputs.

Common questions

What does “inflation-adjusted value” mean?

It is your future savings expressed in today’s purchasing power. For example, if you end with 100,000 in nominal money but inflation was high, that 100,000 might only buy what 70,000 buys today. The calculator does that conversion so you can compare fairly across time.

Why can my balance grow but my purchasing power fall?

Because nominal growth is not the same as real growth. If inflation averages 6% and your savings account pays 3%, your balance increases, but prices rise faster than your money. Over multiple years, the gap compounds and the purchasing power erosion can be material.

What interest rate do I need to “keep up” with inflation?

At minimum, your nominal interest rate must roughly match the inflation rate to preserve purchasing power. If inflation is 6%, a nominal rate near 6% keeps you near flat in real terms. In practice, taxes and fees can push the required nominal rate higher, but this calculator stays pre-tax for clarity.

How should I pick an inflation rate if I am unsure?

Use a conservative planning figure that reflects your country and spending pattern, then test a range. If you are unsure, run two scenarios: a lower inflation case and a higher inflation case. What matters is the direction and sensitivity. If your results swing a lot, inflation risk is a real planning factor for you.

Do monthly contributions change how inflation works?

Inflation affects the future purchasing power of every amount you save, including contributions. Contributions help because they increase the nominal balance, but the inflation-adjusted result is still what matters. The calculator shows both nominal and inflation-adjusted totals so you can see whether contributions plus interest are doing enough to grow real value.