Inflation Calculator

How inflation eats your savings

At 6% inflation (India's long-term CPI average), money loses half its purchasing power every 12 years. ₹1 lakh today buys what ₹50,000 bought in 2014. ₹1 crore today is what ₹17 lakh was in 2000. This is why “safe” FDs at 7% only beat inflation by 1% — and after tax, often lose to it.

Rule of 72 — quick mental math

Divide 72 by the inflation rate to get how many years until prices double. At 6% inflation, prices double in 12 years. At 8% (lifestyle inflation for urban India), they double in 9 years. The same rule applies in reverse for compound returns: a 12% SIP doubles in 6 years.

Real vs nominal returns

A 10% return on your investment isn't really 10% — it's 10% nominal. After 6% inflation, your real return is only ~3.8% (use 1.10/1.06 − 1, not 10−6). This matters when planning for goals 10+ years out. Equity mutual funds at 12% nominal give ~5.7% real; FDs at 7% give just 0.9% real before tax.

Planning for retirement

If you need ₹50,000/month in today's money for retirement 25 years from now, you'll actually need ₹2.15 lakh/month at 6% inflation. The retirement corpus to generate that, assuming a 6% real-return drawdown for 25 years post-retirement, is roughly ₹4.0 crore. Use this calculator to set the inflation-adjusted goal, then plug it into our SIP calculator to back-solve the monthly investment.

India-specific inflation buckets

Headline CPI is around 5–6%, but private school fees, healthcare and housing inflate at 8–10%. Use a higher rate (8%) for retirement / healthcare planning, a lower rate (5%) for emergency funds and short-term goals.