Inflation Calculator

Quick fact: At 6% annual inflation, ₹1 lakh today will only buy what ₹55,839 buys — meaning nearly half your money's value silently disappears in 10 years without you spending a rupee.

Two Ways to Think About Inflation

This calculator answers two different questions. Future cost: “My monthly expenses are ₹50,000 today — what will they be in 20 years at 6% inflation?” Answer: ₹1,60,357. Real value: “I will receive ₹50 lakh in 15 years — what is that worth in today's money?” At 6% inflation, it is worth only ₹20.9 lakh in real terms. Both calculations are essential for retirement planning, goal setting and evaluating future income streams.

India's Inflation History — What Rate Should You Use?

The RBI targets CPI inflation at 4% ± 2%. In practice, India's average inflation over 2010–2024 has been approximately 5.5–6.5%. For conservative long-term planning, 6% is a reasonable baseline. For medical expenses specifically, use 8–10% as healthcare inflation consistently runs higher than general CPI. For education costs, 8–12% is realistic for private institutions. Using a single flat rate for all categories is a simplification — adjust upward for essentials that matter most to you.

Inflation and Your Investments — The Real Return

Real return = Nominal return − Inflation rate. A savings account earning 3.5% when inflation is 6% has a real return of −2.5% — your purchasing power is shrinking. An FD at 7% with 6% inflation gives only 1% real return. An equity fund delivering 13% CAGR with 6% inflation gives 7% real return — your actual wealth grows at 7% annually in inflation-adjusted terms. This is why equity exposure is not just for the aggressive — it is a practical necessity for anyone wanting to protect long-term purchasing power. See our SIP Calculator to model equity fund growth.

Inflation's Impact on Retirement Planning

This is where inflation does the most damage. If you retire at 60 with ₹50,000/month expenses and live to 85, your expenses in the final year will be ₹2,14,594/month at 6% inflation — over 4× your starting expenses. Your retirement corpus must sustain this escalating withdrawal for 25 years. This is why most retirement calculators — including ours — use an inflation-adjusted withdrawal approach rather than a flat monthly withdrawal. Use our Retirement Calculator to compute the exact corpus and monthly investment needed for your situation.

✓Verified by ToollyX Team · Last updated June 2026