$100,000 feels like a lot today. But a dollar’s buying power doesn’t stay still — inflation erodes it every single year. The question isn’t really “how much money will I have in 20 years” but “what will that money buy.”
Here’s the honest math, with numbers you can reproduce on our Inflation calculator.
The core number: your money shrinks every year
Inflation means prices rise. If prices rise 3% a year, the same $100 today buys what $103 bought last year. Over two decades, that compounding eats a surprisingly large share of what you’ve saved.
For a starting amount of $100,000, after 20 years:
| Inflation rate | What it buys in today’s dollars | Share of value lost |
|---|---|---|
| 1% | $81,954 | 18.0% |
| 2% | $67,297 | 32.7% |
| 3% | $55,368 | 44.6% |
| 5% | $37,689 | 62.3% |
At a 3% average inflation rate — close to the U.S. long-run average — $100,000 in the bank keeps only about $55,000 of its current buying power in 20 years. At 5%, it’s down to roughly $38,000.
This is why “a big number” on a statement can be misleading. The only number that matters for your lifestyle is buying power — and that’s what compounds against you.
The reverse question: what you’ll actually need
Flip it around. To have the same buying power as $100,000 today, you’ll need more nominal dollars in the future, because prices will be higher:
| Inflation rate | Nominal amount needed in 20 years |
|---|---|
| 2% | $148,595 |
| 3% | $180,611 |
| 5% | $265,330 |
At 3% inflation, you need roughly $180,000 in 20 years just to match what $100,000 buys today. Planning for a nominal goal without adjusting for inflation means planning for a smaller real goal than you think.
A reasonable inflation assumption is central to retirement planning. If you plan around today’s dollars but spend in future dollars, the gap between what you saved and what you need can be enormous — which is why the Retirement calculator and Savings Goal calculator both let you work with inflation-adjusted numbers.
What’s a reasonable inflation assumption?
Two useful reference points:
- The U.S. Federal Reserve targets 2% annual inflation as its long-run goal, and much of the post-1990s period ran near that level.
- The longer-run average has been higher. From 1913 to today, U.S. CPI-U (the Consumer Price Index for All Urban Consumers) has compounded at roughly 3% a year — the index went from about 9.9 in 1913 to roughly 334 in mid-2026 (Source: U.S. Bureau of Labor Statistics CPI). More recently, headline CPI was running around 3.5% year-over-year as of June 2026 (Source: BLS, via Reuters).
So planning with 2–3% as a central case, and stress-testing with higher rates, is a reasonable, evidence-based approach. The tool makes it easy to see the difference between 2% and 5% in a minute.
Investing is the usual answer — but returns are also nominal
Money that just sits in cash loses to inflation almost every year. Historically, the stock market has delivered returns well above inflation: the S&P 500 has averaged roughly 10% a year in nominal terms (about 7% after inflation) since 1926, per long-run data from NYU Stern (Source: NYU Stern historical returns).
But note the same principle applies in reverse: a 7% nominal return minus 3% inflation is really about a 4% real return. If you see a 7% annual gain on a statement, your actual purchasing power is growing by roughly 4%.
For a fuller look at how your investments grow on top of inflation, see our Compound Interest calculator and the guide to your real investment return.
The takeaway
- Buying power is the real number. A nominal balance can look fine while quietly losing purchasing power.
- 2–3% inflation is a sensible planning assumption — and stress-testing higher rates is cheap to do.
- Inflation-adjusted planning matters most for long goals like retirement, where 20–30 years of compounding inflation does the most damage.
Run the numbers on the Inflation calculator — amount, inflation rate and years in, and you get both the future nominal amount and today’s buying power, year by year.