How does this calculator work?

This calculator automatically increases your monthly installment by the rate of inflation every year. This ensures that the real value of your monthly savings remains constant over time.

Investing

Inflation-Adjusted SIP Calculator

Determine the returns of an investment that scales with inflation to maintain true purchasing power.

Calculator Inputs

Initial Monthly SIP ($)

Expected Annual Return (%)

Investment Horizon (Years)

Inflation Rate (Sets Annual Step-Up %)

Total Invested:$409,893

Estimated Gains:$1,211,860

Future Corpus (Nominal)

$1,621,753

Today's Buying Power (Real)

$874,758

Purchasing Power Lost

46.1%

Starting with a monthly SIP of $1,000 and increasing your installment by 2.5% (matching the rate of inflation) each year leads to a total investment of $409,893 over 25 years. Your nominal future balance grows to $1,621,753, securing a buying power of $874,758 today (facing a 46.1% drop from inflation).

Wealth Growth with Inflation Hedging

Loading chart visualization...

Return Scenario Comparisons

Conservative (-2%)

8.0% Return

Nominal Value:$1,185,502

Real Value (Purchasing Power):$639,449

Purchasing Power Loss:46.1%

Expected (Base)

10.0% Return

Nominal Value:$1,621,753

Real Value (Purchasing Power):$874,758

Purchasing Power Loss:46.1%

Optimistic (+2%)

12.0% Return

Nominal Value:$2,256,117

Real Value (Purchasing Power):$1,216,928

Purchasing Power Loss:46.1%

Loading interactive interface...

Calculation Methodology & Formulas

This calculator compounds monthly investments that step up annually by the inflation rate:

P_year = P_initial × (1 + inflation)^{year - 1}

Real-World Compounding Projections

Hedging against 3% inflation

Starting with $1,000/month, your SIP increases to $1,030 in Year 2, and so on. Over 25 years at a 10% return, your total nominal corpus is $1,617,144, which buys exactly what $772,328 buys today.

Frequently Asked Questions (FAQ)

Related Planning Tools

InvestingSIP Calculator

InvestingStep-Up SIP Calculator

InvestingTarget Corpus Calculator