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Equivalent value
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What is money from one year worth in another? Adjusted using real US CPI data.
Inflation is the gradual rise in prices over time, which means each unit of currency buys a little less than it did before. If prices rise 3% a year, something that cost $100 last year costs $103 this year, and your savings lose that much purchasing power if they are not earning at least as much. Over decades the effect is large: at 3% inflation, prices roughly double every 24 years.
How it is measured. Statistics agencies track the price of a representative basket of goods and services, the Consumer Price Index (CPI), and report the percentage change. The calculator above uses historical inflation to show what a past amount is worth in today's money, or what a future amount will be worth after inflation erodes it.
Why it matters for saving. Money sitting in a low-interest account is quietly shrinking in real terms. To preserve or grow purchasing power, your return needs to beat inflation. This is the core argument for investing rather than holding cash for long-term goals, and for negotiating pay rises that at least match the cost of living.