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Inflation calculator: What will be the value of Rs 1 crore after 10, 20, 30 years

 

The decline in the value of the rupee over the medium to long term highlights the importance of careful retirement planning. We often plan our finances based on today's purchasing power, but this will steadily decrease over time.


Inflation calculator: What will be the value of Rs 1 crore after 10, 20, 30 years?

In today’s times, retiring with a corpus of Rs 1 crore might seem substantial, as it can easily fulfill various retirement goals such as purchasing a house, funding a child’s education, or covering the expenses of a child’s marriage.

However, have you ever considered whether this amount will be sufficient if you retire after 10, 20, or 30 years? The reality is that inflation erodes the value of money over time, and what seems like a significant amount today may not be enough to meet your post-retirement needs in the future.

In this article, we’ll explore how inflation gradually diminishes the purchasing power of your savings, highlighting the importance of long-term financial planning.

How does inflation erode the value of money?

Having Rs 1 crore in your bank account seems large today but it might not be enough to meet your future financial requirements. This is because the value of money decreases over time due to inflation. For instance, if a car costs Rs 10 lakh today, it will likely cost much more in 15 years. To understand this better, think about how much you used to spend on groceries or rent 10 or 15 years ago compared to now. The difference shows how inflation erodes the value of money. So, even if Rs 1 crore seems big now, it might not be sufficient in the future.

What will be the value of Rs 1 crore after 10, 20 or 30 years?

Assuming a 6% inflation rate, the value of Rs 1 crore will diminish to Rs 55.84 lakh. This shows the impact of inflation on long-term savings and investments.

Looking further ahead, after 20 years, the value of Rs 1 crore will shrink to around Rs 31.18 lakh, factoring in 6% inflation.

Finally, after 30 years, Rs 1 crore will be worth approximately Rs 17.41 lakh in today’s terms.

In summary, the decline in the value of the rupee over the medium to long term highlights the importance of careful retirement planning. We often plan our finances based on today’s purchasing power, but this will steadily decrease over time. Additionally, if an investment product offers a 6% return, you’re not actually gaining anything, as inflation at 6% effectively cancels out your returns.

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