How can I calculate the impact of inflation on my investments using the calculator?

Most basic investment calculators do not automatically factor in inflation. However, you can calculate projected inflation using the calculator for a more realistic estimate.

First, adjust the expected rate of return by reducing it to the average annual inflation rate. For example, if expecting a 6% return and 3% inflation, use 3% (6% minus 3%) as the rate input.

Second, for recurring contributions, increase the amount each year by the inflation rate. So, if investing ₹10,000 annually with 3% inflation, in year 2, contribute ₹10,300; in year 3, contribute ₹10,609 and so on.

Or if making a one-time investment, reduce the estimated future value by the compounded inflation rate.

This will estimate actual returns - income adjusted for decreased purchasing power. The impact of inflation is crucial to factor in, as it can significantly reduce net returns on your investments over time. These manual adjustments and an investment calculator can give you a better sense of future value accounting for inflation.