Inflation is the rate at which the general price level of goods and services rises over time, eroding purchasing power. The US Bureau of Labor Statistics publishes the Consumer Price Index (CPI) monthly to measure it. The Federal Reserve targets 2% annual inflation as healthy; periods above 5% are considered painful. At 3% inflation, $100 today buys what $74 will buy in 10 years. Inflation matters for personal finance because cash loses real value sitting in low-yield accounts. To beat inflation, your savings and investments need to earn more than the CPI — historically achieved by stocks (10% nominal), real estate, TIPS, and I-Bonds.
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Inflation
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
1099 Form
Form 1099 is a family of IRS forms reporting various types of non-W-2 income. 1099-NEC reports nonemployee compensation…
529 Plan
A 529 plan is a tax-advantaged education savings account. Contributions grow tax-free; withdrawals for qualified education expenses (tuition,…
ABLE Account
Achieving a Better Life Experience (ABLE) accounts are tax-advantaged savings accounts for individuals with disabilities (onset before age…
AGI
Adjusted Gross Income (AGI) is your total gross income minus specific 'above-the-line' adjustments — traditional IRA contributions, student…
APR
Annual Percentage Rate (APR) is the yearly cost of borrowing money expressed as a percentage of the loan…
APY
Annual Percentage Yield (APY) is the effective annual rate of return on a savings or investment product, accounting…
