See how inflation erodes purchasing power over time and what your money is really worth.
Quick Answer:With an average annual inflation rate of 3.2% in 2026, $100 from 2020 is worth approximately $82 in purchasing power today. To maintain the same buying power, you would need about $122 in 2026 for what $100 bought in 2020.
Adjusted Value
Calculating... in ending year dollars
Purchasing Power Lost
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Cumulative Inflation
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Equivalent Amount Needed
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Years Spanned
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| Year | Value | Purchasing Power | Cumul. Inflation |
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At 3.2% annual inflation, your money loses half its purchasing power in about 22 years. To protect against inflation, consider investments that historically outpace it: stocks (average 10% return), real estate, Treasury Inflation-Protected Securities (TIPS), and I Bonds. Keeping large cash balances in low-yield savings accounts guarantees a loss of real value over time.
The long-term average US inflation rate is approximately 3.2% per year. However, inflation varies significantly year to year. In recent years, inflation spiked to 8% in 2022 before moderating to around 3-4% in 2024-2026. The Federal Reserve targets a 2% annual inflation rate.
Inflation erodes purchasing power over time. At 3% annual inflation, $100 today will only buy about $74 worth of goods in 10 years. Conversely, you would need about $134 in 10 years to buy what $100 buys today. This is why investments need to outpace inflation to maintain real value.
The Consumer Price Index (CPI) measures the average change in prices paid by consumers for a basket of goods and services over time. The annual percentage change in the CPI is the most commonly cited inflation rate. The Bureau of Labor Statistics (BLS) publishes CPI data monthly.