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How Much Raise to Keep Up With Personal Inflation
If your personal inflation rate is higher than your raise, your purchasing power can shrink. This page shows the simple math to estimate the break-even raise under your assumptions. It is educational only, not advice or a forecast.
Published: December 30, 2025 · Updated: December 30, 2025 · By FinToolSuite Editorial
Disclaimer
- Educational purposes only, not financial or career advice.
- Examples are illustrative and simplified.
- Results depend on your inputs and assumptions and are not guaranteed.
- This page does not predict wages, taxes, or inflation.
- See the Privacy Policy for handling details.
Open the personal inflation basket calculator
Build your basket, set weights, and compare your rate to a raise.
Quick answer
- A break-even raise is roughly your personal inflation rate.
- Taxes and deductions can change the take home result.
- Use scenarios, not one perfect number.
- This is math for planning, not advice.
The idea in one line
Net pay can differ because of taxes and deductions, so treat this as a starting point.
Step by step math
- Estimate current annual take home or salary baseline.
- Estimate personal inflation rate from your basket.
- Compute the adjusted income target.
- Compare target vs current to get a percent.
Worked example
| Input | Value |
|---|---|
| Current income | $60,000 |
| Personal inflation rate | 4% |
| Target income | $60,000 × 1.04 = $62,400 |
| Raise needed | ≈ 4% |
This rough example ignores taxes and other changes. Use your own numbers and include net pay for a clearer picture.
Why your number can differ from CPI
Different weights and household mixes make personal inflation different from CPI. Build your basket with your own categories, then compare using the personal inflation basket calculator and the personal inflation formula.
Scenario testing
| Scenario | Personal inflation | Break even raise (rough) |
|---|---|---|
| Low personal inflation | 2% | ≈ 2% |
| Base personal inflation | 4% | ≈ 4% |
| High personal inflation | 6% | ≈ 6% |
Run your own basket, adjust assumptions, and include net pay to see how the range shifts.
Important limitations
- Not a forecast.
- Taxes, bonuses, benefits, and one-off costs can change outcomes.
- Changing expenses can matter as much as income.
- Do not treat decimals as guarantees.
FAQ preview
Is the break even raise the same as CPI?
No. Personal inflation uses your basket; CPI is an average.
Why does my number feel higher than CPI?
Big categories in your basket may be rising faster.
Does this include taxes?
Use the salary tool for taxes; this math is about spending and inflation.
What if my expenses changed this year?
Update your basket and rerun scenarios.
Should I use low or high assumptions?
Run low, base, and high to see a range.
Can I export my basket?
Yes. Export tables and charts from the tool.
Is this career advice?
No. It is educational math only.