Savings vs. Inflation
See how much buying power your savings keep when your account earns a certain interest rate while prices rise at a different pace. Compare nominal (sticker-dollar) growth vs. real (inflation-adjusted) growth.
Assumptions
This assumes a constant interest rate and inflation rate over the entire period, with no additional contributions or withdrawals.
Buying Power Over Time
Buying power retained74.4%
Real value kept
Lost to inflation
After 10 years, your savings grow from $50,000 to $58,027 in nominal dollars. Adjusted for inflation, the real value feels more like $43,178 in today's dollars.
| Year | Nominal balance | Real balance (today's $) |
|---|---|---|
| 1 | $50,750 | $49,272 |
| 2 | $51,511 | $48,554 |
| 3 | $52,284 | $47,847 |
| 4 | $53,068 | $47,150 |
| 5 | $53,864 | $46,464 |
| 6 | $54,672 | $45,787 |
| 7 | $55,492 | $45,120 |
| 8 | $56,325 | $44,463 |
| 9 | $57,169 | $43,816 |
| 10 | $58,027 | $43,178 |
Snapshot After Chosen Period
Future value (nominal dollars)
$58,027
What your account statement shows in the future.
Future value (today's dollars)
$43,178
What that future balance really feels like after inflation.
Buying power retained
74.4%
Share of your nominal future balance you keep in real terms.
Inflation drag (lost purchasing power)
25.6%
Portion of your nominal future dollars erased by inflation.
Real Growth vs. Headline Rate
Nominal APR: 1.5%, Inflation: 3.0%. That means your approximate real return is around -1.5% per year.
Every year, inflation quietly eats about -1.5% of your apparent return if your savings yield stays below inflation.
Quick Interpretation
- • If your savings rate is below inflation, your real wealth is shrinking even though the dollar amount is growing.
- • If your savings rate is roughly equal to inflation, you're treading water — you maintain buying power but don't gain much ground.
- • If your savings rate is above inflation, your real wealth grows — your future dollars buy more than today's.