Inflation Calculator
Future Value Result
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Inflation Rate: %
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Surprisingly, INR 1 lakh in 2001 is only worth about INR 27,000 today due to inflation. This means that the effect is exactly like compound interest since inflation happens on top of inflation from the prior year.
In this blog, we’ll examine the reasons why this happened as well as what will be the value of 1 lakh after 20 years.
| To beat inflation effectively, try this step-up SIP calculator to increase investments yearly and build more wealth. |
What will be the value of 1 lakh after 20 years?
Simply said, with 1 lakh rupees of money 20 years ago, you could have bought a lot more than you can today. As a result, even if you can acquire 1 lakh rupees or more after saving for 15, 20, or 30 years, its actual value would be substantially lower.1 lakh would be worth roughly INR 48,000 in 15 years, assuming a 5% inflation rate.
Additionally, the value decreases even more with a longer time horizon. Assuming an annual inflation rate of 5%, the value of one lakh will be about INR 37 thousand, INR 29 thousand, and INR 23 thousand after 20, 25, and 30 years, respectively.
The answer is to set aside money that is adjusted for inflation. You must first inflate the goal’s cost to determine the criteria for that.
Start a SIP after that to begin saving for the inflated goal cost(We suggest to start a Step Up SIP)
Also read: Cheapest cities in India to live
How can SIP make you rich?
SIP can be used to invest in long-term equity. You may use it to routinely make small mutual fund investments without attempting to time the market.
It would be advantageous if you kept up with SIPs during both the bull and bear market periods to accumulate money.
Let’s take a look at an example of how SIP may make you rich
Think about investing INR 10,000 in an equity fund every month. You may build an INR 3.53 crore corpus if you invest just INR 10,000 per month through a SIP in an equity fund over 30 years.
Compounding power increases money and helps you become wealthy. To develop a sizable corpus for retirement, you will need to start saving early so that you may do so throughout your working life.
Please be aware that we’ve projected a 12% average return from the equity fund. The markets and the fund might affect actual results.
Also read : Value of 30 Lakhs after 20 years
What is inflation?
Inflation is sometimes quantified in generic terms, such as the overall increase in prices or the increase in the cost of living throughout a country.
However, it may also be computed more precisely for certain products, like food, or services, such as haircuts or travel expenses.
Inflation, regardless of the setting, is a measure of how much a certain set of products and services have grown in price over time.
According to inflationary pressure, you should expect to pay more this year than you did last year for the same products and services.
You can benefit if you had the assets before the price increase, such as houses and stocks. But your purchasing power decreases if your income does not keep up with inflation.
Over time, inflation increases your cost of living, and if it is severe enough, it may be detrimental to the economy. For a nation’s economy, high inflation has far-reaching effects.
Assessing the impact of inflation
Let’s calculate how much you would need to have in 10, 15, 25, and 30 years to equal the wealth valued at INR 1 lakh now.
| In 10 years | In 15 years | In 20 years | In 30 years | |
| Equivalent Corpus | 2 | 2.8 | 5.4 | 7.6 |
| Multiplication Factor | 2 | 2.8 | 5.4 | 7.6 |
Consider your child’s further education as an example. Assume it costs INR 20 lakh at the moment. Assume once more that he would attend college in 15 years.
Now you need to calculate how much this education which currently costs INR 20 lakhs will cost in 15 years. Utilize the 2.8 multiplicands from the chart above.
To pay for your child’s further education after 15 years, you would need a corpus of (INR 20 lakhs * 2.8) = INR 56 lakhs
You need to check out our College Cost Calculator to understand education expenses.
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How to fully secure yourself and your family’s future?
You need to be more calculated and cautious if you’re going to save money for your post-retirement lifestyle. In addition to inflation, you must take into account the likelihood of surviving past your planned retirement age and changes in interest rates.
You should review and reevaluate your goals. Working with actual figures is necessary. You may speak with financial experts at EduFund if you’re unsure about where or how to invest.
By using EduFund to invest your money, you can support the dreams of your kids. Install the EduFund app on your device to book a free consultation call with the experts.
To avoid having their child’s bright future ruined by education inflation, parents may start saving for their child’s college education early on.
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FAQs
Q. What does “value of ₹1 lakh after 20 years” actually mean?
It means purchasing power. Due to inflation, ₹1 lakh in the future will buy less than ₹1 lakh buys today. So this calculation tells you what today’s ₹1 lakh might feel like (in terms of buying power) after 20 years.
Q. Is this calculator showing inflation-adjusted value or future growth value?
This is inflation-adjusted value (also called real value). It shows how much ₹1 lakh will be worth in today’s money after inflation erodes its buying power.
If you want to know how ₹1 lakh can grow with investing (like SIP or mutual funds), that is a different calculation.
Q. What inflation rate should I use for India?
A simple approach many families use:
- 5% to 6% for long-term general inflation
- 8% to 10% for education inflation (often higher than CPI in many years)
Best practice: run 3 scenarios (example 5%, 7%, 9%) so you do not get surprised later.
Q. Why does education inflation feel higher than normal inflation?
Because education costs rise due to multiple factors like:
- Fees increasing faster than salaries in many years
- Higher demand for quality colleges and schools
- Added costs like coaching, devices, transport, hostel, and international exposure
So even if CPI looks moderate, education budgets can still blow up.
Q. Where can I check India’s official inflation data?
For official CPI numbers, you can refer to:
- MOSPI (Ministry of Statistics and Programme Implementation) CPI releases
- RBI inflation commentary and reports
These help you choose a realistic inflation assumption for planning.
Q. What if inflation turns out higher than what I assumed?
That is a very real risk. If inflation is higher:
- Your goal amount will need a bigger corpus
- Your SIP may need a step-up sooner
Simple solution: plan with a higher “buffer” rate (example 1% extra) and do a yearly review.
Q. How often should I revisit my goal amount and inflation assumption?
At least once a year.
Also revisit when:
- Fees increase sharply
- Your income changes
- You change the target college or country
- Currency moves a lot (for overseas education)
Q. How do I protect my child’s education goal from inflation?
Three practical steps:
- Estimate the inflated goal cost (future fees)
- Start SIP early so compounding has time
- Use step-up SIP (increase SIP yearly as income grows)
Q. Is an FD enough to beat inflation for a 15 to 20 year goal?
Usually, FD returns may struggle to beat inflation after tax, especially for long horizons. FDs can still be useful for:
- Short-term goals (1 to 3 years)
- Safety bucket near the goal date
But for long-term goals, many parents use a mix of equity + debt, based on risk comfort.
Q. Should I invest lump sum or start SIP for long-term goals?
If you have surplus money today, lump sum can work, but many families prefer SIP because:
- It reduces timing stress
- It builds discipline
- It averages out market ups and downs
A mix also works: small lump sum + monthly SIP.
