See how inflation erodes your money

Inflation means the same amount of money buys less over time. At 3% annual inflation, $100 today will only buy what $74 buys in 10 years — a 26% reduction in purchasing power. Over 20 years at 3%, purchasing power drops to $55. This is why keeping all your savings in a low-interest account is risky — if your savings earn 2% but inflation runs at 3%, your real wealth is shrinking by 1% per year. Investments in shares, property, and assets that historically outpace inflation are the primary tool for preserving long-term wealth. Use our compound interest calculator to model inflation-adjusted returns.

Australia's CPI (Consumer Price Index) inflation has averaged approximately 2.7% per year over the last 30 years. The Reserve Bank of Australia (RBA) targets an inflation band of 2–3%. In 2022–2023, inflation spiked to 7–8% due to global supply chain disruptions and energy prices, before moderating back toward the target range in 2024–2025. Historical AU CPI presets are available in this calculator for different time periods. For current CPI data, check the Australian Bureau of Statistics (ABS) website.