Inflation, in plain English

Inflation means prices rise over time, so the same dollar buys less each year. If your pay does not rise with it, you are quietly taking a pay cut, even though the number on your paycheck never went down.

• Purchasing power is what your money actually buys. At 4% inflation, $100 of groceries costs about $148 in ten years.
• A cost-of-living raise is the raise that just keeps you even. Anything less is a real pay cut.
• Cash sitting idle loses value every year inflation runs. That is the quiet cost of doing nothing.

Real build uses Bureau of Labor Statistics CPI data. The rates here are illustrative, not a forecast, and this is education, not advice.