Inflation is the silent erosion of purchasing power. At 6% annual inflation — India's long-run average — the real value of ₹1 lakh today becomes approximately ₹74,000 in 5 years, ₹55,000 in 10 years, and ₹30,000 in 20 years. For retirement planning, this means the corpus that feels adequate today will buy significantly less by the time you actually retire.

India's Consumer Price Index (CPI) inflation has averaged around 5–6% over the last two decades, with food inflation frequently above 7–8%. For conservative financial planning, using a 6–7% inflation assumption is prudent. Urban expenses — education, healthcare, rent — have historically inflated faster than the CPI headline number, often at 8–10% per year.

This calculator shows the future cost of any current expense at a given inflation rate. Use it to determine how much a specific expense (school fees, rent, medical insurance premium) will cost in future years, and then back-calculate the investment corpus needed to fund it. Pair the output with the SIP calculator to compute the monthly SIP needed to build an inflation-adjusted corpus by your target date.

The most powerful hedge against inflation in India is a diversified equity mutual fund portfolio — specifically Large Cap, Flexi Cap, or Multi-Asset funds. Over 15–20 year horizons, equity mutual funds have consistently delivered real returns (after inflation) of 5–8% annually, preserving and growing purchasing power. Fixed deposits typically yield 0–2% real returns after adjusting for inflation and tax.