Why one crore rupees today will not buy one crore's worth later: planning a retirement target
Many people say, "I want one crore for retirement." That is a fine starting point, but there is a trap in it. A crore twenty-five years from now will not buy what a crore buys today, because prices rise over time. If you plan with a target that ignores this, you may save less than you need. This guide shows a simple way to fix that, using numbers we calculated ourselves.
What the RBI says about inflation now
The Reserve Bank of India's Monetary Policy Committee resolution of 7 October 2026 projects consumer price inflation of 5.2% for 2026-27. That is a projection for one year, not a promise about the next twenty-five years. For long-term planning, many households simply pick an assumption and test a few values. In the example below we use 6% a year. That 6% is our assumption, not an RBI forecast.
Step 1: Convert today's target into future rupees
The formula is: future cost = today's amount x (1 + inflation) raised to the number of years.
Suppose you want your retirement money to have the buying power of Rs 1 crore (Rs 1,00,00,000) in today's prices, and you retire in 25 years. With 6% yearly inflation:
- 1,00,00,000 x 1.06^25 = about Rs 4,29,18,707.
So you would need about Rs 4.29 crore at that time to buy what Rs 1 crore buys today.
Step 2: See the reverse picture
Now flip it. If you only manage to collect Rs 1 crore in 25 years, what is it worth in today's money? Divide instead of multiply:
- 1,00,00,000 / 1.06^25 = about Rs 23,29,986.
So a crore in 25 years would buy roughly what Rs 23.3 lakh buys today under that assumption. That gap is the reason inflation matters for retirement planning.
How the time you have changes the answer
Using the same 6% assumption and a Rs 1 crore target in today's money:
- After 20 years you need about Rs 3,20,71,355.
- After 25 years you need about Rs 4,29,18,707.
- After 30 years you need about Rs 5,74,34,912.
Each extra five years adds a large amount. A longer runway gives you more time to build the sum, but also a bigger number to build.
Step 3: Turn the target into a monthly saving
Once you know the future target, you can work out a monthly saving. That step needs an assumed yearly return on your investments, which no one can guarantee. Markets go up and down, and returns are not promised. The Gunaka Retirement goal planner lets you enter a target, the years left, a return assumption, an inflation assumption and an optional yearly step-up in your savings. Try low, middle and high return values, not just one, and see how the answer changes. If the monthly figure looks too big, you can add years, raise the yearly step-up, or lower the target.
A short checklist
- Decide the target in today's rupees, for example your yearly expenses after retirement.
- Pick an inflation assumption and test a higher one too.
- Convert to a future target with the formula above.
- Review once a year and adjust as your income and prices change.
This is a planning aid, not a prediction. Gunaka gives estimates, not financial advice. For personal planning, consider speaking to a SEBI-registered adviser.
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