What inflation rate should I use for planning?

Use 6% for general expenses, 8–10% for healthcare and education. Real estate and luxury inflates differently — model those separately.

Is inflation in India higher than reported CPI?

For urban middle-class households, perceived inflation is often 1–2% above CPI due to higher weighting of services, rent and education. Plan conservatively.

How do I beat inflation?

Diversified equity (12%+), real estate REITs (8–10%), and gold (~8%) historically outpace inflation. Avoid bank savings accounts for any meaningful surplus.

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Investing

Inflation Calculator

See the real future cost of money — and how much purchasing power inflation steals over time.

Inputs

Present value

₹100₹1,00,000₹10,00,00,000

Inflation rate

1%India's long-term avg: 6%20%

Tenure

yrs

1 yrs2050 yrs

Results

Today's cost

₹1,00,000

Future cost

₹3,20,714

Lost value

₹2,20,714

Why inflation matters

Inflation is a silent wealth killer. India's CPI has averaged ~6% over the last two decades — meaning ₹100 today buys what ₹176 will buy in 10 years.

Any investment that doesn't beat inflation is losing purchasing power. Bank savings accounts at 3.5% lose ~2.5% real value every year. Even FDs at 7% barely break even post-tax for high earners.

Inflation formula

FV = PV × (1 + i)^n

FV — Future value (cost in n years)
PV — Present value (today's cost)
i — Annual inflation rate
n — Years

Example: ₹1L today at 6% inflation

Present value: ₹1,00,000
Inflation rate: 6%
Tenure: 20 years
Future value: ₹3,20,714
Lost purchasing power: ₹2,20,714

What costs ₹1L today will cost over ₹3.2L in 20 years at 6% inflation. Plan accordingly.

Frequently asked

Why model inflation

1Plan retirement corpus that lasts your real lifetime.
2Set realistic SIP targets that beat inflation, not just match it.
3Compare investments on real (post-inflation) yields.
4Decide between fixed and floating income products.
5Stay protected against lifestyle inflation creep.

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