Question 1

What is an inflation calculator used for?

Accepted Answer

It projects what a fixed amount of money today will need to grow to in the future to have the same purchasing power, given an assumed inflation rate — useful for planning goals like a child's education, a wedding, or retirement expenses years in advance.

Question 2

What inflation rate should I use?

Accepted Answer

India's headline CPI inflation has recently been running closer to 3-4% annually (below the RBI's 4% medium-term target), though it has historically averaged higher — around 5-6% — over longer stretches of the past two decades. For long-term goal planning, many advisors still use a slightly conservative 5-6% general assumption as a safety margin. Specific categories run higher regardless of the headline number — education inflation is often 8-10%, wedding costs 8-10%, and healthcare 12-15%. Use a rate that matches the type of expense you're projecting, not a generic average.

Question 3

How does inflation affect my investment planning?

Accepted Answer

If your investments grow slower than inflation, your money loses real purchasing power even while the number on paper grows. This is why long-term goals are usually planned using equity-heavy investments (which have historically outpaced inflation) rather than low-interest savings accounts.

Question 4

Is inflation the same every year?

Accepted Answer

No — actual inflation fluctuates year to year based on economic conditions. This calculator assumes a constant rate for simplicity, which is a reasonable planning approximation but will not match real-world year-by-year inflation exactly.

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