SIP at 35 for Rs 7 Cr Corpus: Are you 35 with ambitions of Rs 7 cr corpus? Here's why you have strong chance to build it

SIP at 35 for Rs 7 Cr Corpus: Salaried-class individuals should start retirement planning from the first salary they get. But most delay it for a number of reasons. It may be because they have a responsibility, a financial commitment, or a financial goal that made them a delayed starter. But even if one has lost the initial years of their investment, it's not too late for them. It's how soon they can start from this point. If you are also a 35-year-old dreaming of as large a retirement corpus as Rs 7 crore, you may still achieve it.

All you may need to do is to start an SIP investment, step up the amount by 5 percent annually, and show long-term consistency in your investing.

Know how a 35-year-old may generate an Rs 7 crore corpus through a step up SIP investment.

How much you should invest monthly 

For salaried-class individuals, monthly investment can be a convenient method to invest. It suits their earning cycle, and they can modify their date of investment or amount as they want.

One should invest at least 10 per cent of their income.

A 30 per cent is a healthy ratio.

But if one doesn't have many responsibilities, they can increase the percentage of their investment.

Step up SIP investment 

While it is important to invest a substantial portion of your salary, it is equally important to boost this amount as and when your income rises.

While such a step up is most likely to help you create a larger corpus compared to when you don't step up the amount, it can also help you beat inflation. 

SIP vs step up SIP

Now just see the difference in the corpus generated with or without a step up amount.

A and B both start a Rs 10,000 monthly SIP investment each for 20 years.

While A doesn't increase the investment amount from the beginning to end, B boosts the amount by 5 per cent annually.

If the annualised rate of return is 12 per cent, let's see the corpus they can generate in 20 years.

In 25 years, A's total investment will be Rs 30,00,000, estimated capital gains will be Rs 1,40,22,066, and the estimated corpus will be Rs 1,70,22,066.

B's total investment in 25 years will be Rs 57,27,252, estimated capital gains will be Rs 1,91,01,233, and the estimated corpus will be Rs 2,48,28,485.

You can see that with an Rs 27,27,252 extra investment, the extra corpus generated is Rs 78,06,419.

How you may build Rs 7 crore corpus starting at 35 years of age

If you are 35 years old and want to retire at 60 years of age, you have a 25-year investment horizon. 

If you start a Rs 25,000 monthly SIP investment, step up this amount by 5 per cent a year, and get a 13 per cent annualised return on your investments, you may get an estimated retirement corpus of over Rs 7 crore by 60 years of age. Know how it may pan out!

In 25 years, the total investment will be Rs 1,43,18,130, estimated capital gains will be Rs 5,72,21,593, and the estimated corpus will be Rs 7,15,39,723.

Power of compounding 

In long-term investments, the power of compounding plays a key role.

A small investment can create a large corpus in the long term because the growth of the previous year is added to the principal.

When this process happens every year, investments grow exponentially in the long run.

(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)