How Inflation Erodes Your Purchasing Power & Retirement Savings

What is Inflation?

Inflation represents the rate at which the general level of prices for goods and services rises, subsequently causing purchasing power to fall. As inflation increases, each unit of currency buys a smaller percentage of a good or service.

Check the real value of your cash over time: [Inflation Impact Calculator](/tools/inflation-calculator).

How Inflation Affects Your Savings

If you keep your cash in a basic savings account earning 2% interest while the annual inflation rate is 6%, your money is effectively losing 4% of its purchasing power every year. Although your nominal balance is rising, the real-world goods that balance can purchase are shrinking.

Factoring Inflation into Retirement Planning

When planning for long-term goals:

Run inflation projections instantly with the [Inflation Impact Calculator](/tools/inflation-calculator).