What does this tool do?
Inflation erodes what a salary can buy. This calculator shows the salary needed after a number of years to preserve purchasing power, and how a planned raise compares.
The Formula
Required salary = Current salary × (1 + inflation)^yearsFrequently Asked Questions
Is a 3% raise a real raise?
Only if inflation is below 3%. At 3% inflation the raise roughly maintains purchasing power before tax.
Why compound inflation?
Prices rise on the previous year prices, so the effect compounds. Over long periods small differences add up.