Inflation Calculator
Calculate how inflation erodes purchasing power of money. Shows what amount you'll need in the future to maintain today's standard of living.
Inflation Calculator
Result
How it works
Formula Used
Future Cost = Current × (1 + inflation)^years Shows the purchasing power erosion over time
Smart Tips
- India inflation average: 5-6% per year
- Use 6-7% inflation for retirement planning
- Asset allocation must beat inflation for real growth
Best Used For
Plan real retirement corpus, adjust savings targets
FAQs
What inflation rate should I use for India?
Long-term average: 5-6%. For conservative retirement planning, use 6-7%. Current inflation varies (check RBI data), but historical average is reliable. Different expense categories inflate differently—food 6%, services 4%, real estate 8%.
How does inflation affect my retirement planning?
If you need ₹50k/month today, with 6% inflation you'll need ₹134k/month in 20 years. Your retirement corpus must generate inflation-adjusted income. This is why 4% withdrawal rule exists—ensures corpus lasts.
Should I invest to beat inflation or just save?
Definitely invest. Bank savings give 3-4% interest, but inflation is 5-6%, so real return is negative. You lose purchasing power. Equities (10-12%) beat inflation long-term. Bonds (6-7%) at least match inflation.
Why is inflation-adjusted return important?
Real return = Nominal return - Inflation. ₹1L growing at 10% with 6% inflation gives real return of 3.8%. You think you gained 10%, but actual purchasing power gain is 3.8%. Always calculate real returns for true wealth assessment.
Embed Tool
Want to add this Inflation Calculator to your own website? It's free and easy!