Inflation Calculator: Impact of Inflation on Savings
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Are you wondering how long it will take to reach your savings goals—and how those future savings will be affected by inflation and taxes? Our savings calculator with tax and inflation determines the future value of your savings based on the savings information you provide. The calculator assumes you save with a taxable account, but if you want to simulate saving with a tax-advantaged account (like a Roth IRA), enter a zero in the fields for federal and state income tax rates. The results will show your future savings both with and without taking taxes and inflation into account.
How Inflation Shrinks Savings
In 2009, a movie ticket cost $7.50 on average. By 2019, it was $9.16. That's the effect of inflation. The price of a movie ticket, a house, or a semester in college tends to rise over time, sometimes quickly and at other times slowly—and that can impact your personal savings plan, too. Let's say you have $100 in a savings account that pays a 1 percent interest rate. After a year, you will have $101 in your account. But if the rate of inflation is running at 2 percent, you would need $102 to have the same buying power you started with. You've gained a dollar but lost buying power. Any time your savings don't grow at the rate of inflation you will effectively lose money.
Fifth Third can help you grow your savings. Learn more about our savings accounts, find a branch, or give us a call at 1-877-579-5353.
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