Results are estimates for illustration only and not financial, tax, or investment advice. Verify with a qualified, registered advisor before making decisions.
SIP Calculator with Inflation
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Factoring inflation into SIP calculations reveals the real future purchasing power of your investments. For a ₹10,000 monthly SIP at 12% return over 15 years, nominal corpus reaches ₹50,45,760, but with 6% annual inflation, real purchasing power equals ₹21,05,419 in today's money. Real value is computed as: Nominal Corpus / (1 + r_inflation)^tenure.
Calculate inflation-adjusted mutual fund SIP returns. Compare nominal portfolio growth against real purchasing power across 5, 10, 15, and 20-year horizons to plan realistic financial goals.
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How to Calculate Inflation-Adjusted SIP Returns?
- The monthly investment is preset to ₹10,000.
- Input your expected nominal annual return (default is 12%).
- Enable 'Adjust for Inflation' and verify the assumed inflation rate (default is 6%).
- Examine both the nominal corpus and the inflation-adjusted purchasing power in today's rupee terms.
Nominal vs Inflation-Adjusted Corpus for ₹10,000/Month SIP (12% Return, 6% Inflation)
| Tenure | Total Invested | Nominal Corpus (12%) | Real Value (6% Inflation) | Purchasing Power Retained |
|---|---|---|---|---|
| 5 Years (60 mo) | ₹6,00,000 | ₹8,24,864 | ₹6,16,386 | 74.7% |
| 10 Years (120 mo) | ₹12,00,000 | ₹23,23,391 | ₹12,97,369 | 55.8% |
| 15 Years (180 mo) | ₹18,00,000 | ₹50,45,760 | ₹21,05,419 | 41.7% |
| 20 Years (240 mo) | ₹24,00,000 | ₹99,91,479 | ₹31,15,390 | 31.2% |
Source: Real value formula: Real Corpus = Nominal Corpus / (1 + Inflation)^Years. Assumptions: 12% nominal return, 6% annual inflation.
Why Inflation Adjustment Is Essential for Financial Planning
Looking only at nominal numbers creates an illusion of wealth: - A goal of ₹50 Lakh in 15 years will only buy what ₹21.05 Lakh buys today at 6% annual inflation. - At 6% inflation, the cost of living doubles roughly every 12 years (Rule of 72). - Planning retirement, college funds, or housing based on nominal future values leaves you underfunded.
Beating Inflation with Equity SIPs
Fixed deposits and traditional savings typically yield 6% to 7%, barely matching inflation after tax. Equity SIPs targeting 11% to 13% generate a real post-inflation rate of return of 5% to 7%, growing your purchasing power.
Frequently asked questions
What is the real return of a 12% SIP at 6% inflation?
The approximate real rate of return is (12% - 6%) = 6%, or precisely ((1 + 0.12) / (1 + 0.06)) - 1 = 5.66% per year in purchasing power growth.
Why does ₹1 Crore in 20 years equal only ~₹31 Lakh today?
Compounding inflation erodes currency value over time. At 6% inflation per year, prices rise by (1.06)^20 = 3.207 times in 20 years, meaning ₹1 Crore in 2046 will have the purchasing power of ₹1 Crore / 3.207 = ~₹31.18 Lakh today.
How can I protect my retirement goal from inflation?
Increase your SIP contribution each year through a Step-Up SIP (e.g. 5% to 10% annual increase) so your investments keep pace with rising lifestyle costs and salary growth.
Need a different size? Use the full SIP Calculator.