If you retire after 10, 20, 30 years and you are thinking of collecting Rs 1 crore, then what will be the value of Rs 1 crore? How will inflation gradually reduce your savings?
Everyone wants to become a millionaire, due to which people invest in various savings schemes from the stock market. In today’s time, Rs 1 crore seems like a big deal. Especially regarding retirement, people think that every goal can be achieved with 1 crore like buying a house, raising funds for the child’s education, or meeting the expenses of the child’s marriage etc. But have you thought that if you retire after 10, 20 or 30 years, then what will be the value of 1 crore and will it be sufficient for your goal?
It is often seen that inflation reduces the value of money over time. What seems like a big amount today, does not remain that big later on. Its value is not sufficient even to meet the needs. In this news, we are telling that if you retire after 10, 20, 30 years and you are thinking of collecting 1 crore rupees, then how much will be the value of this one crore rupees at that time? How will inflation gradually reduce your savings?
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How does inflation reduce savings?
Today having 1 crore rupees in your bank account seems like a big deal, but it may not be enough to meet your future financial needs. This is because the value of money decreases over time due to inflation.
Example- If the price of a car today is Rs 10 lakh, then after 15 years its price will be very high. To understand this better, think how much you used to spend on groceries or rent 10 or 15 years ago, whereas now it is much more. This difference shows how inflation erodes the value of money. So, even though Rs 1 crore may seem like a lot now, it may not be enough to meet your needs in the future.
Value of Rs 1 crore after 10, 20 and 30 years?
Assuming a 6% inflation rate, the value of Rs 1 crore after 10 years will reduce to Rs 55.84 lakh. Going further, after 20 years, considering 6% inflation, the value of Rs 1 crore will reduce to around Rs 31.18 lakh. Whereas after 30 years, the value of Rs 1 crore will be around Rs 17.41 lakh as per today’s rates.
On the other hand, if we assume that you get a return of 6% on this saving as compared to the inflation rate of 6%, then you will not actually gain anything and the value of your Rs 1 crore will remain the same as Rs 1 crore.
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