Inflation Adjusted Buying Power

This calculator allows you to estimate the inflation-adjusted purchasing power. It assumes a fixed inflation rate.  After you enter the desired retirement income and estimated inflation, it estimates the purchasing power in TODAY'S DOLLARS.

Once can also determine the future dollar income needed to generate the desired retirement income purchasing power.

It is desirable to have your debts or payments at a fixed rate and to have your income adjusted for inflation.  For example, if you owed payments of $1,000 and inflation was 10%. After a year your payments would be $909.09 in TODAY'S dollars. However, if you had an income of $1,000 adjusted for inflation, your income would be $1,100 in current (year later) dollars.

Inflation is the amount of price increase each year. Even at a low inflation rate of 2 or 3%, the buying power of income at the end of 30 years will be much less than the buying power of the income generated in year one.

Future Buying Power = TVM PV calculation where rate = Inflation Rate, nper = number of years into future, pmt = 0, FV = (-)Retirement Income Desired.

Future $ Needed = TVM FV calculation where rate = Inflation Rate, nper = number of years into future, pmt = 0, pv = (-)Retirement Income Desired.