How inflation erodes purchasing power: a 10-year analysis

Inflation is often described as a silent tax. You do not feel it day to day, but over years it dramatically reduces what your money can buy. A dollar in 2015 is worth about 78 cents today. That 22% loss of purchasing power happened quietly.

The 2015–2025 inflation story

The last decade saw two distinct phases. From 2015 to early 2020, inflation ran at roughly 2% per year — the Federal Reserve’s target. Then came the pandemic. Supply chain disruptions, stimulus spending, and pent-up demand pushed inflation to 9.1% in June 2022, the highest in 40 years. While it has cooled since, prices have not come down. They simply stopped rising as fast.

What $100 could buy in 2015 would cost about $128 today. Your dollar goes 22% less far.

What this means for your savings

Money in a checking account earning 0% interest loses purchasing power every year. At 3% inflation, $10,000 in cash loses $300 of purchasing power annually. Over 10 years, that same $10,000 would be worth only $7,440 in today’s dollars.

This is why investing is not optional. Your money must grow at least at the rate of inflation just to break even. Historically, the stock market has returned 7-10% annually, well above inflation. Bonds return 3-5%. Cash loses.

Real-world examples

A dozen eggs that cost $2.50 in 2015 costs about $4.50 today. A gallon of gas went from $2.50 to $3.50. A movie ticket from $9 to $13. These small differences compound into significant changes in your cost of living.

The house you could have bought for $300,000 in 2015 would cost roughly $400,000 today. That extra $100,000 in price is partly real appreciation and partly inflation.

The one number that matters

Your real return is your nominal return minus inflation. A 7% investment return with 3% inflation is a 4% real return. Use the Inflation Calculator to see how much any dollar amount from the past is worth today.