Guide
Why Inflation Makes Your SIP Worth Less Than You Think
The corpus a calculator shows you is in future rupees. What it buys is a different, smaller number.
In shortInflation means a future corpus buys less than the same rupees today. At 6% inflation, ₹1 crore in 20 years has roughly the purchasing power of ₹31 lakh today. Plan in real terms: set targets in today's money, inflate them to the goal year, and judge returns after both tax and inflation.
Nominal versus real
A nominal figure is the rupee amount you'll have. A real figure is what that amount can actually buy, expressed in today's prices. Inflation is the gap between them.
At 6% inflation, prices roughly double every 12 years. So a corpus 24 years away is worth about a quarter of its nominal value in today's purchasing power — a sobering adjustment most projections leave out.
Why this changes your target
If you plan in nominal terms, you'll systematically under-save. A goal that feels covered by a ₹1 crore nominal corpus may need far more to deliver ₹1 crore of today's lifestyle.
That's why our goal solver lets you set the target in today's money — it inflates the goal first, then solves for the SIP that funds the real future cost.
Planning against inflation
Two levers help: step-up SIPs (raising contributions over time) and a long horizon (so compounding outruns inflation). The real-value figure in our calculators is there precisely so you can check whether your plan actually beats inflation, not just nominal growth.
Sources
- Mutual Funds Sahi Hai: investor education Association of Mutual Funds in India
- SEBI Investor Website Securities and Exchange Board of India
Rules and rates were checked against these official sources at the last review.
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