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Keeping Up With Inflation Calculator

Calculate how much of a raise you need to keep up with inflation and maintain your savings rate over time.

Inputs
Enter your income, spending, and inflation assumptions.

Inflation & Tax Settings

%

Expected annual increase in prices that affects your monthly spending.

%

Your marginal income tax rate, used to convert required after-tax income increases into pre-tax raise percentages.

Before Inflation

$

Your current monthly after-tax income.

$

Your current monthly spending before inflation is applied.

Results
Calculate required raises for two scenarios.

Before Inflation

YOUR SAVINGS RATE:40.0%
YOUR MONTHLY SAVINGS:$2,000
Monthly spending after inflation (no raise):$3,300

To keep up with inflation

Raise needed to keep spending constant:10.0%
MONTHLY TAKE-HOME PAY:$5,300
MONTHLY SAVINGS:$2,000
Savings rate after raise:37.7%

To maintain your initial savings rate of 40.0%%

Raise needed to maintain your original savings rate:16.7%
MONTHLY TAKE-HOME PAY:$5,500
MONTHLY SAVINGS:$2,200
On inflation
Inflation is taxation without legislation.
— Milton Friedman

About this calculator

This calculator estimates how much of a raise you need to keep up with inflation and shows how rising costs affect your income, spending, and savings.

It compares two scenarios: maintaining the same dollar savings amount, or maintaining your original savings rate as prices increase.

What each input means

  • Annual inflation rate (%) Expected yearly increase in prices that raises your cost of living.
  • Marginal income tax rate (%) Used to convert after-tax income needs into a pre-tax raise percentage.
  • Monthly take-home pay Your current after-tax income.
  • Monthly spending Your current monthly expenses before inflation.

How this calculator works

The calculator increases your monthly spending based on the inflation rate, then determines how much additional income is required to offset that increase.

Two scenarios are calculated: (1) a raise that keeps your monthly savings amount unchanged, and (2) a raise that preserves your original savings rate as a percentage of income. Tax rates are used to convert required after-tax income into an equivalent pre-tax raise.

Factors that affect Results

  • Inflation rate – Higher inflation requires larger raises to maintain purchasing power.
  • Spending level – Higher spending increases inflation exposure.
  • Savings rate – Maintaining a higher savings rate requires a larger raise.
  • Tax rate – Higher taxes increase the gross raise required.

Key assumptions & limitations

  • Inflation is uniform – Assumes all expenses rise at the same rate.
  • Income is linear – Does not model bonuses, promotions, or variable pay.
  • Tax rate is fixed – Uses a single marginal rate for simplicity.
  • Estimates only – Results are illustrative, not financial advice.

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