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Inflation Calculator
What a sum will cost in future, what today's money will then be worth, and the return needed to stand still.
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Result
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Inflation does not change what you have. It changes what it buys, which is the only thing that matters.
Both directions
₹1 lakh of spending today costs about ₹2.4 lakh in fifteen years at 6%. The same ₹1 lakh sitting in cash will buy what ₹42,000 buys today. People usually need one of those figures and quote the other.
The return you actually need
To preserve purchasing power you need to earn inflation after tax. At a 30% slab and 6% inflation, that means a pre-tax return of about 8.7% just to break even. A savings account at 3% is a guaranteed loss of purchasing power, however safe the balance looks.
Your inflation is not the published rate
Headline CPI is a national average basket. Education, healthcare and domestic help have run well above it for two decades. If those are a large part of your spending, plan on a higher number.
Frequently asked questions
What inflation rate should I use for planning?
6% is a reasonable general assumption for India. Education and healthcare have run materially higher for two decades, so use 8% to 10% for those specific goals.
What return do I need just to break even?
You need to earn inflation after tax. At a 30% slab and 6% inflation, that means a pre-tax return of about 8.7%. A savings account at 3% is a guaranteed loss of purchasing power however safe the balance looks.
Is my personal inflation the same as the published rate?
Usually not. Headline CPI is a national average basket weighted heavily towards food and fuel. If school fees, domestic help and medical costs are a large part of your spending, your personal rate is higher.
How does inflation affect retirement planning?
It is the single largest variable. One percentage point of extra inflation over thirty years can raise the required corpus by a third, which is why retirement figures look implausible until you work through the arithmetic.