Inflation Calculator — Future Value

Inflation means the general price level rises over time, so the same amount of money buys less in the future. If inflation averages 6% per year, something that costs Rs 100 today will cost about Rs 179 in 10 years. Your money is not disappearing — it is just losing purchasing power. This is why keeping large amounts in a savings account earning 3-4% actually results in a net loss of wealth in real terms.

India's CPI inflation has averaged around 5-6% over the past decade, but the number that matters for your plan depends on what you are saving for. Education inflation runs at 8-10%, healthcare at 10-12%, and general living costs at 5-7%. Using a single blanket rate of 6-7% is reasonable for most calculations, but for specific goals like education or medical expenses, use the higher category-specific rates.

The key is to invest in assets that consistently beat inflation. Equity mutual funds and stocks have historically returned 10-14% annually over the long term, comfortably outpacing inflation. Real estate and gold also tend to keep up with or exceed inflation. Fixed deposits and savings accounts, while safe, typically lag behind inflation after accounting for taxes. A diversified portfolio tilted toward equities for long-term goals is one of the most effective inflation hedges.