$100 → $74 in 10 years
Inflation's real impact on your money
At 3% inflation, $100 today is worth roughly $74 in 10 years and halves in real purchasing power in about 24 years. Cash savings lose value every year in real terms, so salary increases must beat inflation to count as real raises. Inflation also affects expense categories unevenly — housing and healthcare typically outpace headline CPI.
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Try calculatorKey takeaways
04 · ideas- 3% inflation halves purchasing power in ~24 years
- Cash savings lose value every year in real terms
- Salary increases must beat inflation to be real raises
- Inflation affects different expense categories differently
Inflation is the gradual rise in prices over time. At 3% annual inflation:
- $100 today → $74 in 10 years (in purchasing power)
- $100 today → $55 in 20 years
- $100 today → $41 in 30 years
This means money sitting in a savings account earning 0.5% interest is losing purchasing power every year when inflation runs at 3%+.
The practical impact: If your salary increases by 2% but inflation is 4%, your real income fell by 2%. You're earning more dollars but buying less.