Find out the SIP needed to reach a goal, after increasing the goal's value to account for rising prices between now and then.
The goal amount is first inflated to what it will actually cost in the future.
The required monthly SIP is then calculated against that larger, inflation-adjusted number.
Inflated goal: Goal × (1 + inflation)ⁿ
Required SIP: Reverse SIP formula on the inflated goal
A goal-based investment calculator plans for a specific target, such as a house down payment, a child's wedding or a sabbatical, while accounting for the fact that the goal will cost more by the time you reach it. You state the goal at today's prices, and the calculator first inflates it to the future cost, then works out the monthly SIP needed.
This two-step approach is how most financial planners in India structure advice. A goal named at today's price is easy to understand; the inflated figure is what you actually need to fund. Skipping the inflation step is the most common reason people fall short even after investing regularly.
It suits any goal more than a few years away that you plan to fund through a monthly SIP from zero.
1. State the goal at today's price G, the years to the goal N, expected inflation π% and expected return R%.
2. Inflate the goal: future goal F = G × (1 + π ÷ 100)ᴺ.
3. Find the monthly rate i = R ÷ 1200 and the number of months n = 12N.
4. Compute the SIP factor: ((1 + i)ⁿ − 1) ÷ i × (1 + i).
5. Monthly SIP = F ÷ SIP factor.
6. Revisit every year, updating the goal cost and the actual value of your investments.
The goal grows at the inflation rate while your SIP grows at the return rate. What really matters is the gap between them, the real return. If return and inflation were equal, the SIP would only keep pace with the goal and you would need to fund almost all of it from contributions. The wider the gap, the more compounding helps. That is why long goals are usually funded with equity, where the expected real return is higher, and short goals with safer instruments despite their lower real return.
Shortening the time hurts twice. The goal inflates less, which helps a little, but the SIP has fewer months and less compounding, which hurts much more. For a ₹20 lakh goal at 6% inflation and 12% return, moving from 15 years to 10 years raises the monthly SIP by roughly 60%. This is why goal planning rewards an early start, and why a late start usually needs a larger SIP, a longer timeline or a smaller goal rather than a riskier investment.
The calculator assumes a constant return up to the goal date. In practice, an equity-heavy portfolio can fall sharply in the final year, with no time to recover. Planners therefore shift money gradually into debt or liquid funds over the last two or three years, a process sometimes called a glide path. This lowers the average return slightly, so building in a small margin, either a slightly higher SIP or a slightly lower return assumption, is prudent.
Ashok wants ₹15 lakh at today's prices for a home down payment in 8 years. He expects 6% inflation and an 11% return from a hybrid fund SIP.
Answer: Required monthly SIP ₹15,498; Inflation-adjusted goal amount ₹23,90,772
Planning for the goal at today's price and forgetting inflation.
Using an equity return for a goal three years or less away.
Using general inflation for goals such as education or healthcare that usually rise faster.
Not reducing the goal for money already saved towards it.
Staying fully in equity up to the goal date.
Planning a home down payment, wedding or vehicle purchase.
Setting up separate SIPs for different family goals.
Deciding whether a goal date is realistic or needs to move.
Reviewing goal progress each year with updated costs.
Why inflate the goal before calculating the SIP?
A car that costs ₹10 lakh today will cost more in 10 years, because of inflation. If you plan around today's price without adjusting for this, you will fall short of your real goal.