Compare future pay with a purchasing-power target
Use this scenario to estimate the nominal salary that would preserve a starting salary under one constant annual inflation assumption. Enter current annual salary, annual inflation rate, years, and—if useful—a future salary offer. Dollar values must share a currency and the offer should refer to the end of the chosen period.
Compounded method
The supported relationship is product-defined: factor = (1 + inflation rate)^years; salary needed is current salary × factor. Raise needed is the difference from current salary, and cumulative inflation is factor - 1. When a positive future offer is supplied, its gain or shortfall is measured against the inflation-adjusted target.
With a $60,000 salary, 3% annual inflation, and five years, the factor is 1.03^5 = 1.159274..., giving a target of $69,556.44 and a required nominal raise of $9,556.44. A $70,000 future offer is $443.56 above that target in this scenario. Try 2% and 4% as separate cases: the spread is more informative than treating one forecast as certain.
Interpretation and limits
A positive gap means the offer exceeds this modeled target, not that total compensation or personal purchasing power improved. The model uses one compounded rate and omits taxes, benefits, regional prices, spending mix, promotions, and changes in hours or duties.
Current and future salaries cannot be negative, years cannot be negative, and inflation cannot be below -50% in the supported range. A zero future offer suppresses the offer comparison. Blank, invalid, or out-of-range numbers are rejected. Long periods amplify small rate changes, while deflation can produce a lower target and negative “raise needed.”
This is not compensation, payroll, tax, or employment advice. Use the salary calculator next if you need to translate the resulting annual figure into gross pay frequencies.