What is a Goal Planner?
Most financial goals, such as a child's education, a home or a car, will cost more in the future because of inflation.
This goal planner first estimates what your goal may cost when you need it, then works out the monthly SIP or one-time investment needed to reach it.
How it helps you
- Turn today's cost of a goal into its likely future cost.
- Know the monthly SIP required to reach it on time.
- Compare a monthly SIP with investing a lump sum today.
How it is calculated
Future cost = Cost today × (1 + f)ᵗ; SIP = Future cost ÷ [ ((1 + i)ⁿ − 1) ÷ i × (1 + i) ]
- f
- Expected yearly inflation ÷ 100
- t
- Years until the goal
- i
- Monthly rate = expected yearly return ÷ 12 ÷ 100
- n
- Number of months = t × 12
A goal costs ₹25,00,000 today and is 10 years away. You assume 6% inflation and a 12% expected return.
- 1Future cost = 25,00,000 × (1.06)¹⁰ ≈ ₹44,77,119
- 2Monthly SIP needed to reach that in 120 months at 1% a month
- 3Or a one-time investment today = 44,77,119 ÷ (1.12)¹⁰
Monthly SIP ≈ ₹19,270, or about ₹14,41,513 invested once today.
How to use the Goal Planner
- 1Enter what the goal would cost if you bought it today.
- 2Set the number of years until you need the money.
- 3Set the expected return and inflation.
- 4Read the monthly SIP or one-time amount needed.
Frequently asked questions
What inflation rate should I use?
General inflation in India has often been around 5–6%, but costs like education and healthcare have frequently risen faster. Use a higher rate for those goals.
What if I already have some savings for this goal?
Subtract the future value of your existing savings from the goal, or reduce the goal amount, to find the remaining SIP needed.
Should short-term goals be in equity?
Goals only a few years away are usually better suited to lower-volatility options, because there is little time to recover from a market fall.
Are the results guaranteed?
The result is an estimate based on a constant rate. Actual market returns change every year and are not guaranteed.