How much will things cost
in the future?

Inflation is the silent risk that most financial plans underestimate. A 6% annual inflation rate seems modest, but it causes prices to double in 12 years and triple in 19 years. This means a retirement corpus that looks sufficient today will be severely inadequate if planned without inflation adjustment. Every long-term financial goal — retirement, child’s education, healthcare reserve — must be calculated in future rupees, not today’s rupees.

Different expenses inflate at very different rates. General consumer inflation (CPI) in India has averaged 5–7% in recent years. But healthcare inflation runs at 10–14% annually, and education costs have risen 8–10% per year. This means you should use different inflation rates for different goals: 6% for general retirement expenses, 8% for education, and 10%+ for healthcare. Blending all goals under one 6% rate will leave your health and education funds chronically short.

The most actionable insight from inflation planning is this: your investments must return more than inflation to actually grow your wealth. A savings account paying 4% interest when inflation is 6% is not earning — it is losing 2% of purchasing power every year. This is why long-term financial goals require growth assets like equity mutual funds, not just safe instruments like FDs and savings accounts. Use this calculator alongside the SIP and retirement calculators to find the investment return you actually need.