Just as 25¢ isn’t as powerful as it used to be, neither will $20 be in the not-so-distant future.
Even though you’re saving now, you may realize you need to start saving more once you take inflation into account. Luckily, there are such things as inflation calculators you can use online to gauge what your future purchasing power is going to look like in the years ahead.
Inflation calculators ask such questions as your current age, gross annual income, retirement age, life expectancy, percentage of income at retirement, as well as expected inflation rate. Answer the questions, and it will tell you how much it will cost to enjoy the same standard of living you have now.
Note: In the past ten years, the highest inflation has risen is 3.2%, but it’s normally stayed between 1.5 and 2.5% (the average is just 1.6% year to year). We recommend entering 3% just to be safe.