A $100,000 salary in 2020 equals about $124,353 in 2025 in terms of purchasing power.

You may have seen this claim online

“A $100,000 salary in January 2020 has the same buying power as $124,353 in April 2025.”

It sounds dramatic. But is it true? And what does it actually mean for your finances?

Let’s break it down using data from the U.S. Bureau of Labor Statistics (BLS).

What the Numbers Show

To measure how much inflation has impacted our money, economists use the Consumer Price Index for All Urban Consumers (CPI-U). It tracks the cost of a fixed basket of goods and services over time—essentially a way to measure what our dollars can buy.

• CPI in January 2020: 257.971

• CPI in April 2025: 320.795

  
  

Now, let’s apply the inflation formula

$100,000×(320.795257.971)=$124,353\$100,000 \times \left(\frac{320.795}{257.971}\right) = \$124,353$100,000×(257.971320.795​)=$124,353

This confirms the statement: A $100,000 salary in 2020 would need to be $124,353 in April 2025 to have the same purchasing power.

What This Means

If your income hasn’t increased by at least 24.35% over the last five years, then your actual buying power has gone down. You’re technically making less, even if your salary hasn’t changed on paper.

The prices of goods and services have quietly climbed while many wages haven’t kept pace. This is why even middle-class earners feel like they’re falling behind financially.

Did the Dollar Really Lose 25 Percent of Its Value?

Let’s clarify. The CPI rose by 24.35% from January 2020 to April 2025. That means the cost of living increased by nearly one-quarter.

But to measure how much purchasing power the dollar lost, we calculate:

257.971320.795≈0.8042\frac{257.971}{320.795} \approx 0.8042320.795257.971​≈0.8042

That means today’s dollar is worth about 80.42 cents compared to its 2020 value—a loss of about 19.58% in purchasing power.

So when people say “the dollar lost 25% of its value,” they’re typically rounding the inflation rate rather than measuring exact purchasing power loss. Still, it’s close enough for everyday conversation and reflects a real and noticeable financial shift.

Why This Matters

This isn't just a technical issue. It affects how you live:

• You may feel like your money isn't stretching as far.

• You may be struggling with rent, gas, groceries, or medical bills—even though your salary technically hasn't changed.

• Employers who don’t adjust wages for inflation are effectively offering pay cuts over time.

These numbers explain why many Americans feel frustrated: the math is working against them.

Yes, the claim is accurate. A $100,000 salary in 2020 equals about $124,353 in 2025 in terms of purchasing power. The dollar’s strength has weakened by nearly 20% in just over five years. That’s not just inflation on paper—it’s a real-world impact on your paycheck, your savings, and your quality of life. If you’ve been feeling the squeeze lately, you’re not imagining it. The numbers back you up.