See two sides of inflation at once: what a given cost grows to in the future, and how much purchasing power a fixed sum quietly loses over the same span.
Inflation rarely feels dramatic year to year, but compounded over decades it reshapes everything. At a 3% rate, prices roughly double every 24 years, meaning a fixed sum of cash loses about half its purchasing power over that time. For a retirement that might last 30 or 40 years, ignoring inflation is one of the biggest planning mistakes you can make.
A projection that says you'll have three million dollars in forty years sounds impressive until you realize what three million will buy then. Expressing future amounts in today's dollars real dollars strips out inflation so the number reflects actual purchasing power. It's the only way to sanity-check whether a plan truly supports the life you want.
General inflation is an average. Some costs notably healthcare and college have historically risen faster, while others rise more slowly or even fall. A thoughtful retirement plan treats categories differently rather than applying one blanket rate to everything, which is exactly how a detailed planner models your future spending.