Inflation Calculator

Why inflation belongs in every money plan

Inflation is easy to forget because it works slowly. Prices that rise six percent a year do not feel dramatic in any single month, yet over a decade they change what money can buy. Something that costs ₹50,000 today would cost about ₹89,500 in ten years at 6% inflation. Put the other way round, ₹1 lakh kept as cash would buy only about ₹56,000 worth of today's goods after the same period.

Use this calculator before you set any long-term target. If you are saving for a child's education fifteen years away, the figure to aim for is the future cost, not today's fee. Education and healthcare have often risen faster than general prices, so it is sensible to use a higher rate for those goals than for everyday spending.

Inflation also tells you what a good return looks like. A savings account paying 3% while prices rise at 5% is quietly losing value, even though the balance goes up. When you compare investments, think in real terms: the return after inflation, and ideally after tax as well. You do not need to predict inflation precisely. Testing two or three rates, such as 5, 6 and 7 percent, gives you a sensible range and stops you from planning around one optimistic number. Retirees should pay special attention, because a fixed pension loses buying power every year they draw it, and a long retirement magnifies that loss. Building inflation into every goal from the start is far easier than discovering the shortfall when the bill finally arrives.