One Million Dollars: How Much Will It Buy In Thirty Years?

I don’t have a million dollars just yet; in fact, I’m far from it!  If I’m diligent with my savings, my retirement account will reach the big M, but what does that really mean in 30 years?

The number itself doesn’t mean anything – the purchasing power of those dollars is what counts.

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I know you realize how inflation eats away at the purchasing power of our dollars year after year, but when we put it into perspective it becomes really apparent how one million dollars may not be as big of deal in 40 years.

Rewind 30 Years… Average Costs Then, Now And In The Future

I have no idea what things will cost in 2041, but what I do know is how to research what things cost 30 years ago.  There’s no guarantee that inflation will be the same in the next 30 years, but to put things into perspective, I’ll forecast each projected cost with a reasonable average of 3% inflation per year.

  • Average Cost of a New Home in 1980: $86,400
  • Average Cost of a New Home in 2011: $246,000
  • Projected Cost of New Home in 2041: $597,000

That just sounds scary… over a half million dollars for a home on average!  I would hope that home prices don’t bubble like they did these last few decades, but for consistency we’ll use the same rates.

  • Average Cost of a New Car in 1980: $5,413
  • Average Cost of a New Car in 2011: $28,400
  • Projected Cost of New Car in 2041: $68,934

Almost $70,000 for an average car?  That sounds crazy.  If a new car increased in price by five times in thirty years, who’s to say it couldn’t double in the next thirty.

  • Cost of a Stamp in 1980: $0.19
  • Cost of a Stamp in 2011: $0.44
  • Projected Stamp cost in 2041: $1.07

Who knows if stamps will even be around in 30 years!

  • Average Cost of a Gallon of Milk in 1980: $2.16
  • Average Cost of a Gallon of Milk in 2011: $3.78
  • Projected Cost of a Gallon of Milk in 2041: $9.18
  • Average Income in 1980: $11,321
  • Average Income in 2011: $46,323
  • Projected Income in 2041: $112,438

With a quick glance at all of these common expenses, it’s easy to see how one million dollars may go by quicker than we expect.  I know that 30 years might seem far away, but ask someone who is age 50+ about the 80’s and 90’s and they’ll probably say it seemed like yesterday.  Even if prices aren’t this high in 30 years, the idea of a million dollars will probably continue to get smaller and smaller as people see an increase in income (and expenses!).

I’m still hopeful to have saved a million dollars one day, but if I’m spending $10 for a gallon of milk, I might feel better if my account had $2 million.

Are you shocked by these figures?  What other items are you curious about? Mention them in the comments and I’ll run a similar projection.

Last Edited: 10th February 2014

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    Share Your Thoughts:

  1. says

    That is pretty crazy looking at the projected costs of a new car or a gallon of milk in 30 years. That really is one of the forgotten things when it comes to the retirement discussion – that we’ll have to deal with inflation over the next 30 years, and our 1 million won’t have the same purchasing power it does today. The moral of the story – get saving and save as much as you can!

    Since you mention that you could run other projections, how about seeing the costs for some other things – like a home computer – or a trip to the grocery store?

    • says

      If a PC or laptop runs $700 today, it might go for $1,700 in 30 years!

      If you’re a Mac person, an Apple laptop at $1500 today may run $3,600!

      A trip to the grocery store might cost you $100 for the week…in 30 years that might be $242! ( A monthly food budget of $400 today may actually be $970 in 30 years!)

      • Robert says

        Pcs in 83 were 3000 dollars. Technology gets cheaper. My brother in law bought a console tv in 81 for 1000 dollars. In 2010, he bought a 40 inch LCD tv for 700 dollars. Truth is computers will be cheaper and smaller, the desktop will mostly be gone in 30 years

  2. Steve Riker says

    Great article.

    If anything, I thought it was incredibly optimistic.

    It seems likely that real inflation will be much higher than 3% over the next 30 years.

    Certainly the numbers you showed for automobiles and home show a much greater rate of inflation than 3%.

    Keep up the great work, thanks for stirring our brains a bit.


  3. says

    Thank you Tim for reminding us (or shocking us) that it is your purchasing power that matters. This is especially true for retirement planning, where Peter makes the point in his comment that getting started early and saving as much as you can is the best way to keep up with inflation. There are so many variables that no one can know what something is going to cost 30 years from now. Items like computers may be 100 times better and cost less. Other items may force us to change the way we live (i.e. live on smaller homes). Getting the big picture is what matters! Thanks Tim.
    Ken Faulkenberry

  4. says

    Numbers are fine, but I’d rather look at expenses and savings in terms of hours and years saved respectively. My goal is to retire when we have 25 times our annual income saved. Easy to track regardless of what things cost.
    In 1980, milk was 23 minute’s wage, in 2011, less than 10 minutes, this looks great from where I sit.

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