Inflation Calculator — Money Erosion
Discover how much your money is really worth over time. Everything runs locally — no data is saved.
What will things cost in 20 years?
What Is Inflation and Why Does It Matter?
Inflation is the general increase in prices across the economy. When prices rise, every shekel you hold buys fewer goods and services. In Israel, inflation is measured using the Consumer Price Index (CPI), published monthly by the Central Bureau of Statistics. The Bank of Israel targets an annual inflation rate of 1%-3%, but actual rates fluctuate and sometimes exceed this target.
The cumulative effect of inflation is enormous. Even at a moderate rate of 3% per year, the purchasing power of your money drops by more than 45% within 20 years. This is why money sitting in a checking account or a low-interest deposit gradually loses its value. To preserve your wealth, you need to invest in assets that generate returns above the inflation rate.
Common strategies to protect against inflation include: investing in CPI-linked government bonds, real estate, stocks and index funds, pension funds, and Hishtalmut funds. It is especially important to ensure your pension savings are invested in a track that delivers positive real returns — that is, returns that exceed inflation.