What inflation rate should I assume in India?

Consumer price inflation has averaged roughly 5% to 6% a year over the past decade, the usual planning figure for general expenses. Education and healthcare have run higher, around 8% to 10%, so use a goal-specific rate where you can.

What will ₹1 lakh be worth in 20 years?

At 6% inflation, ₹1 lakh today buys what about ₹3.2 lakh will buy in 20 years; put the other way, ₹1 lakh received in 20 years is worth about ₹31,000 today. A target set in today's rupees must be inflated before you plan the SIP for it.

What is the difference between nominal and real return?

The nominal return is the percentage an investment earns; the real return is what is left after inflation. A fixed deposit at 7% with inflation at 6% has a real return of about 1% before tax, and can be negative after tax at the 30% slab.

How does inflation affect a retirement corpus?

Twice: it raises the expenses you must fund on the day you retire, and keeps raising them every year after. A retirement plan inflates today's expenses to the retirement year, then sizes a corpus that can pay an income rising with inflation for 25 to 30 years.

Financial calculatorsInflation Calculator

Inflation Calculator

See what today's expenses will cost in the future.

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Amount today₹1 LInflation rate (p.a.)6%Time period10 yr

Cost today: ₹1 L
Added by inflation: ₹79,085
Cost after 10 years: ₹1.79 L; ₹1 L then buys what ₹55,839 buys today

Cost today₹1 L 56%
Added by inflation₹79,085 44%

India's consumer inflation has averaged about 5–6% a year; education and healthcare run higher.

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How this calculator works

Enter an amount, the number of years and an inflation rate. The calculator compounds the amount forward to show its future price, and the gap between the two numbers is what a savings account cannot cover. It is the first step in every goal plan on this site.

What is an inflation calculator?

An inflation calculator shows what today's expenses will cost in a future year at an assumed rate of inflation. Enter an amount, the number of years and a rate; it compounds the amount forward. The gap between today's figure and the future one is the first number in every goal plan.

How is it calculated?

Future cost = Cost today × (1 + inflation)^years

Inflation is the yearly rate you assume
The result is in the rupees of that future year

₹1 lakh of today's expenses at 6%

Cost today	₹1,00,000
In 10 years	₹1,79,085
In 20 years	₹3,20,714
In 30 years	₹5,74,349

A household spending ₹50,000 a month today needs about ₹2.15 lakh a month in 25 years at 6%.

Questions people ask

Consumer price inflation has averaged roughly 5% to 6% a year over the past decade, the usual planning figure for general expenses. Education and healthcare have run higher, around 8% to 10%, so use a goal-specific rate where you can.
At 6% inflation, ₹1 lakh today buys what about ₹3.2 lakh will buy in 20 years; put the other way, ₹1 lakh received in 20 years is worth about ₹31,000 today. A target set in today's rupees must be inflated before you plan the SIP for it.
The nominal return is the percentage an investment earns; the real return is what is left after inflation. A fixed deposit at 7% with inflation at 6% has a real return of about 1% before tax, and can be negative after tax at the 30% slab.
Twice: it raises the expenses you must fund on the day you retire, and keeps raising them every year after. A retirement plan inflates today's expenses to the retirement year, then sizes a corpus that can pay an income rising with inflation for 25 to 30 years.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Figures are illustrations at an assumed rate, not a forecast. Talk to us to match a plan to your goals.