Summary of this article
At an average inflation rate of 6 per cent, prices roughly double every twelve years.
Headline inflation is only part of the story, and treating every goal as if it moves at 6 per cent understates the problem for some of the most important ones.
Education costs and healthcare expenses have historically run well above general consumer inflation in India, with some estimates placing education inflation in the 10-12 per cent range over extended periods.
Ask someone what they need for retirement, a child's education, or a dream home, and they'll usually give a number anchored to today's prices. Rs 50 lakh sounds like a solid, round target. What that number quietly assumes and what most people never stop to question is: Will Rs 50 lakh buy the same things fifteen years from now that it buys today? It won't, and the gap is larger than intuition suggests.
Running The Actual Numbers
At an average inflation rate of 6 per cent, prices roughly double every twelve years, following what's often called the Rule of 72 - dividing 72 by the inflation rate gives a rough doubling period. On that basis, Rs 50 lakh today could hold the purchasing power of only about Rs 21 lakh fifteen years from now.
“Put differently, someone who needs the equivalent of Rs 50 lakh in today's terms, fifteen years out would actually need to target roughly Rs 1.2 crore in future rupees, just to stand still in real terms. The number on paper can stay identical for a decade while what it buys shrinks by more than half,” says Mayank Prakash, Co-Founder and Director, aarthiq, an integrated financial platform for UHNI/HNI and MSME.
Not All Goals Inflate At The Same Rate
Headline inflation is only part of the story, and treating every goal as if it moves at 6 per cent understates the problem for some of the most important ones. Education costs and healthcare expenses have historically run well above general consumer inflation in India, with some estimates placing education inflation in the 10-12 per cent range over extended periods.
“At 10 per cent inflation, a cost doubles roughly every seven years, meaning a child's higher education, priced today at Rs 25 lakh, could realistically approach Rs 65-70 lakh by the time a child born today is ready for college,” informs Prakash.
Why Long Horizons Make This Worse, Not Better
Intuitively, more time should make a goal easier to reach. But inflation compounds on the same timeline as the goal itself, which is exactly why it distorts long-dated targets the most: retirement, a child's education, a home purchase a decade or more away.
A number calculated once in someone's early 30s and left unrevised can look perfectly reasonable on a spreadsheet for years and still be significantly short of reality by the time it's actually needed. The error doesn't show up early; it shows up all at once, near the goal.
What Actually Adjusts For It
The starting fix is building an inflation assumption into the target itself, rather than treating a goal as a fixed rupee figure. The second is revisiting that target periodically, every few years, rather than setting it once and working toward an unchanged number for a decade or more.
“The third is allocation: returns need to outpace inflation, not just be positive, which is why long-dated goals are typically approached with a different asset mix than near-term ones, where preserving what's already accumulated matters more than growing it further,” says Prakash.
The Bottom Line
Rs 50 lakh was never the goal itself; it was always a stand-in for the lifestyle, the degree, or the milestone it was meant to fund. The cost behind that milestone doesn't pause just because the plan built around it does. It keeps climbing, year after year, whether or not anyone revisits the number meant to cover it.
And because the erosion happens so gradually, it's rarely obvious in the years when there's still time to act; most people only notice the gap once the goal is upon them, when adjusting the plan is no longer really an option.
