How It Works
Inflation measures the rate of rising prices in an economy. Contributing factors include an increase in the cost to produce goods or an increase in the demand for goods or services. No matter the reason, inflation is typical and the Fed has an inflation target of approximately 2% (this helps a healthy economy stay healthy and avoid falling wages and prices).
This calculator demonstrates how inflation can impact spending and saving in your personal life. Just enter your salary and savings, and adjust the inputs. Note that a typical inflation range is about 2-4%, but a healthy rate is more like 1-2%.