Inflation Calculator
See how inflation erodes the purchasing power of money over time.
What this calculator does
Inflation is the quietest thief in personal finance. It doesn't send you an SMS. It doesn't show up as a line item on your bank statement. But every year, your ₹100 note buys about 6% less than it did the year before. Over 20 years, that adds up to your money losing more than two-thirds of its real value.
This is why 'saving' and 'investing' are not the same thing in India. Money sitting in a savings account at 3.5% interest while inflation runs at 6% is quietly losing 2.5% of its value per year. Your bank statement shows a bigger number, but you're poorer in what you can actually buy.
Run this calculator with a real number that matters to you. What will a ₹10 lakh car cost in 10 years at 6% inflation? Roughly ₹18 lakh. What will your child's ₹15 lakh education cost in 15 years at 8% education inflation? Around ₹47 lakh. What will today's ₹40,000 monthly expense look like when you retire in 25 years? About ₹1.7 lakh a month.
Future Cost = Present × (1 + inflation)^yearsVariables explained
- Present value
Today's cost of the goal or expense.
- Inflation rate
6% for general expenses, 8% for education, 9-10% for healthcare in India.
- Time horizon
Number of years into the future.
Worked example: Your child's ₹20 lakh college education in 15 years
PV = ₹20,00,000 · Inflation = 8% · n = 15.
Future cost = 20,00,000 × (1.08)^15 ≈ 20,00,000 × 3.172 ≈ ₹63.4 lakh.
To fund this, you need a SIP of ~₹12,000/month at 11% CAGR over 15 years.
How to read your projection like an adult
Every investment calculator has one built-in lie: the return rate is an assumption, not a promise. If you use 12% for Indian equity mutual funds, that's a rough long-term average — not what your specific SIP will do next year. Markets are lumpy. The projection is a compass, not a GPS.
Run three scenarios: pessimistic (say 8%), realistic (10-11%), and optimistic (13%). If the pessimistic case still gets you close to your goal, you have a robust plan. If only the optimistic case works, you're one bad market cycle away from disappointment — increase your contribution, extend your timeline, or lower the goal.
Also, watch inflation. ₹1 crore in 2046 will buy roughly what ₹30 lakh buys today (at ~6% inflation). The number that looks huge on a projection is smaller in real purchasing power.
Don't stop contributing when the market falls. That's mathematically the worst time to stop. The whole point of a SIP is that you buy more units when prices are low.
Common mistakes
- ✗Using the same inflation rate for education (8%), healthcare (10%), and general (6%). They differ.
- ✗Ignoring inflation when comparing FDs to equity for long-term goals.
- ✗Not inflating retirement expense targets.
Frequently asked questions
What's India's long-term average inflation?+
Around 6% based on CPI over the last two decades. Some years higher (double digits in 2010-2013), some lower (3-4% in 2017-2019).
Is gold a hedge against inflation?+
Roughly — over long periods it keeps pace with Indian inflation. Not a growth asset though. 5-10% of portfolio is a reasonable hedge.
How do I protect my emergency fund from inflation?+
Mix of high-yield savings and liquid mutual funds earns 5-7%, which is roughly inflation-level. Full protection isn't the goal — availability is.
Reminder: this calculator is a learning tool, not personalised advice. For decisions involving your actual money, talk to a SEBI-registered adviser about your specific situation.