Calculate the real purchasing power of your future investments.
Years
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Total Amount Invested
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Nominal Maturity Value
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Inflation Adjusted Value (Real)
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Real Wealth Gain
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Why the "Real" Value Matters More Than the "Nominal" Value
When planning for long-term financial goals like retirement or a child's education, most investors make a critical mistake: they look at the nominal maturity amount. You might calculate that your SIP will grow to 1 Crore in 20 years. However, what will 1 Crore actually buy in 20 years?
This SIP Calculator with Inflation Rate helps you bridge the gap between fantasy and reality. By accounting for the average annual inflation rate, it discounts your future corpus back to today's purchasing power.
Understanding the Inputs
Monthly Investment: The amount you commit to saving systematically every month.
Time Period: The duration of your investment in years. Compounding works best over long horizons.
Expected Annual Return: The average growth rate you expect from your asset class (e.g., 12% for Equity Mutual Funds).
Expected Inflation Rate: The rate at which the cost of living increases. In many developing economies, this averages between 5% and 7%.
The Silent Wealth Erosion: How Inflation Works
Inflation is often called the "silent killer" of wealth. If the inflation rate is 6%, an item that costs 100 today will cost 106 next year. Conversely, your money loses value. If you hide 100 under your mattress, next year it will only purchase 94 worth of goods compared to today.
Example Scenario
Let's say you invest 10,000 monthly for 20 years at 12% return.
Nominal Value (Without Inflation): Your corpus would look massive, approximately 99.9 Lakhs.
With 6% Inflation: The real purchasing power of that money would be equivalent to approximately 31 Lakhs in today's terms.
This drastic difference highlights why you typically need to invest much more than you think to maintain your lifestyle in the future.
How to Interpret the Results
Nominal Maturity Value: This is the actual number you will see in your bank account or investment dashboard at the end of the tenure.
Inflation Adjusted Value (Real): This is the "Today's Value" of that future money. If your goal costs 50 Lakhs today, you need this Real Value figure to meet or exceed 50 Lakhs, not the Nominal Value.
Real Wealth Gain: This represents the actual increase in your purchasing power after accounting for the fact that your own contributions also depreciated in value over time relative to the start date.
Strategies to Beat Inflation
Invest in Equities: Historically, equities are one of the few asset classes that consistently beat inflation by a significant margin (generating positive real returns).
Step-Up SIP: Increase your monthly investment annually. As your income grows and inflation rises, your savings rate must keep pace.
Don't hold too much cash: Savings accounts often yield returns lower than inflation, resulting in negative real growth.
function calculateRealSIP() {
// 1. Get Inputs
var investment = document.getElementById("monthlyInvestment").value;
var years = document.getElementById("investmentDuration").value;
var rateReturn = document.getElementById("expectedReturn").value;
var rateInflation = document.getElementById("inflationRate").value;
// 2. Validate Inputs
if (investment === "" || years === "" || rateReturn === "" || rateInflation === "") {
alert("Please fill in all fields to calculate.");
return;
}
var P = parseFloat(investment);
var t = parseFloat(years);
var r = parseFloat(rateReturn);
var i = parseFloat(rateInflation);
if (P <= 0 || t 0) {
msgElement.innerHTML = "Inflation Impact: Inflation of " + i + "% over " + t + " years will reduce the purchasing power of your maturity amount by approximately " + valueLossPercent + "%.";
msgElement.style.display = "block";
} else {
msgElement.style.display = "none";
}
// Show Results
document.getElementById("resultsSection").style.display = "block";
}