Lesson 2 of 6 · What inflation does to your money · 3 min read · Reviewed 15 Oct 2026
At 6% inflation, prices double about every 12 years. A ₹1 lakh monthly spend today becomes about ₹1.8 lakh in 10 years and ₹3.2 lakh in 20 years. Plans for retirement or a child’s education should use those future prices, not today’s.
Inflation is how fast prices rise. At 6% a year, something that costs ₹1 lakh today costs about ₹1.8 lakh in ten years.
Money in a savings account earning 3% loses buying power every year that inflation is higher. Plans for retirement or education need to use future prices.
Key idea: Real return is what you earn minus inflation.
Try the calculator and the one-question quiz on this page to check your own numbers.
Your return minus inflation. A fixed deposit paying 7% when inflation is 6% gives a real return of about 1% before tax.
This lesson uses 6% as a planning figure. Use a higher rate for costs that have risen faster for you, such as school fees.
Divide 72 by the inflation rate. At 6%, 72 ÷ 6 = 12 years.
For learning only, not investment advice. Designed and built by people who have worked at India’s leading wealth management firms.