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WealthJot.ai
📉 Inflation Impact
See how inflation erodes your purchasing power over time

An Inflation Impact of ₹50,000 for 20 years at 6% is ₹1.60 L.

Formula

Future Cost = Present Cost × (1 + Inflation Rate)^Years

Worked example
InputValue
Today's Amount / Expense₹50,000
Annual Inflation Rate6%
Years20 yr
Future Cost of Same Thing₹1,60,357
Purchasing Power of Today's ₹31.2%
Value Erosion₹1,10,357
Return to Preserve Value6%
Prices Double In11.9 yr

What the inflation calculator shows

InflationThe steady rise in prices that erodes money’s purchasing power. is compoundingEarning returns on your returns — growth that accelerates over time. running against you: at 6%, prices don’t rise “6% a year” so much as double roughly every 12 years (the rule of 70: 70 ÷ inflationThe steady rise in prices that erodes money’s purchasing power. rate ≈ doubling time). The calculator translates that into the two numbers that matter — what today’s money willArranging how your wealth passes on after death. buy in the futureA binding agreement to buy or sell at a set price on a future date., and what today’s lifestyle willArranging how your wealth passes on after death. cost.

Example₹1 lakh today at 6% inflationThe steady rise in prices that erodes money’s purchasing power.: worth ~₹55,800 of purchasing power in 10 years, ~₹31,200 in 20, ~₹17,400 in 30. Flip it: a ₹50,000/month lifestyle costs ~₹89,500 in 10 years and ~₹2.87 lakh in 30. Every long-term planPure, cheap life cover that pays out only if you die in the term. — retirement, education, FIRE — must be built in these *futureA binding agreement to buy or sell at a set price on a future date.* rupees, which is why honest targets look so much bigger than intuition suggests.
The practical unit for every investment decision is the real return: roughly, returns minus inflationThe steady rise in prices that erodes money’s purchasing power.. A 7% FDA bank deposit locked for a fixed term at a fixed rate. in 6% inflationThe steady rise in prices that erodes money’s purchasing power. earns ~1% real — and after 30% tax on the interest it’s ~negative 1%: the money grows in rupees while shrinking in groceries. EquityA unit of ownership in a company.’s ~12% is ~6% real. “Safe” assets that can’t outrun inflation aren’t storing your wealth — they’re bleeding it slowly enough that you don’t notice.
Common mistakeUsing one inflationThe steady rise in prices that erodes money’s purchasing power. number for everything. General CPIThe steady rise in prices that erodes money’s purchasing power. ~5-6% understates the categories that dominate long-term goals: education inflation in India runs ~8-10% and healthcare ~10-12%. A child’s-education or retirement-healthcare plan discounted at 6% willArranging how your wealth passes on after death. fall short by design — dial the calculator’s rate up for those goals specifically.
✓ You learnedAt Indian inflationThe steady rise in prices that erodes money’s purchasing power. rates money halves in purchasing power every ~12 years, so think in real returns (return − inflationThe steady rise in prices that erodes money’s purchasing power.): post-tax FDs hover near zero real, equityA unit of ownership in a company. earns ~5-7% real. Plan long-term goals in futureA binding agreement to buy or sell at a set price on a future date. rupees, and use 8-12% inflation for education and healthcare, not the headline 6%.
FAQs
What inflation rate should I assume for planning?

Use 6% as the general baseline for Indian household planning (CPI has averaged ~5-6% over long stretches), 8-10% for education, and 10-12% for healthcare. Assuming inflation a point too high produces a pleasant surplus; assuming it a point too low produces a shortfall discovered decades too late — err high.

How do I protect my money from inflation?

Own assets whose earnings grow with prices: equity (businesses raise prices — the most reliable long-run inflation-beater), and keep only genuinely short-term money in FDs/liquid funds where inflation’s bite is brief. Gold roughly tracks inflation over very long periods. The one guaranteed loser is idle cash — a savings account at 3% in 6% inflation loses ~3% of purchasing power every year, silently.

Learn the concepts
The One Idea Behind All Investing: CompoundingWhat Returns Can You Actually Expect?