At 6% inflation, prices double roughly every 12 years. That means the ₹50 lakh education fund you are planning for a child who is 6 years old today needs to be nearer ₹1 crore by admission day. Goals set in today's rupees and never inflated are the most common silent failure in financial planning.
The rule of 72, working against you
Divide 72 by the inflation rate to get the doubling time of prices: at 6%, ~12 years; at 8%, ~9 years. Now flip it: the purchasing power of a fixed amount of money halves over the same period. ₹1 crore at retirement in 24 years buys what ₹25 lakh buys today.
One rate doesn't fit all goals
Headline CPI averages ~5–6% in India, but the things you are saving for inflate at their own pace:
| Goal | Realistic inflation | Why |
|---|---|---|
| Higher education | 8–10% | Fee inflation has consistently outpaced CPI |
| Healthcare / retirement living | 7–8% | Medical inflation runs hot worldwide |
| House purchase | 6–8% | City-dependent; land in metros often higher |
| Car, wedding, general goals | 5–6% | Tracks broad CPI more closely |
How to plan correctly
Set the goal in today's money — what the thing costs now. Then inflate it to the goal year and compute the SIP against that inflated number. Our Goal Planner does exactly this: it shows both figures ("₹2.4 Cr in 2046 · ₹1 Cr in today's money") so the target stays meaningful, and it pre-fills a sensible inflation rate per goal type that you can override.
One more implication: your returns are also nominal. A 12% return during 6% inflation is a ~6% real return. That is the number actually growing your wealth — and it is why parking long-term money in a 7% FD (a ~1% real return) rarely beats inflation by enough to fund a big goal.