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Retirement Planning from SIP: Your retirement may be distant, but your disciplined approach towards investment today may make all the difference. A monthly SIP investment of Rs 25,000 for just 5 years may unlock the potential to create a retirement corpus of Rs 3.45 crore. But will it happen in 5 years? No! Any investment takes its time to grow. Compounding shows its impact in the long run. With that, your small initiative of investment can deliver surprising results in the long run.
In this write-up, know how your Rs 25,000 invested monthly for 5 years may unlock the potential to create a Rs 3.45 crore retirement corpus.
SIP investment for retirement corpus building
SIP is a popular mutual investment method, drawing more participants than lump sum investment.
SIP is a periodic investment where an investor can start with as low an amount as Rs 100.
Most mutual funds have Rs 500 as the minimum SIP investment.
Investors can start with a small amount and gradually increase their investment to build a sizeable retirement corpus.
Let's assume a person starts a Rs 5,000 monthly SIP investment and steps up the amount by 5 per cent every year.
Let's see the wealth that they can create at a 12 per cent annualised return by 60 years of age.
In 30 years, the total investment will be Rs 39,86,331, estimated capital gains will be Rs 1,93,92,756, and the estimated corpus will be Rs 2,33,79,087.
How to create Rs 3.45 crore corpus from Rs 25,000 SIP
One may create this corpus in two phases.
In the first step, the investor will invest Rs 25,000 monthly in a mutual fund scheme for 5 years.
In the second stage, they will stop investing and will just let their corpus grow for 25 years. Let's understand it step-by-step.
Corpus from Rs 25,000 SIP in 5 years
In 5 years, the total investment will be Rs 15,00,000, estimated capital gains will be Rs 5,27,590, and the estimated corpus will be Rs 20,27,590.
| Year | Retirement copus |
| 1 | ₹ 3,19,162.45 |
| 2 | ₹ 6,76,624.39 |
| 3 | ₹ 10,76,981.76 |
| 4 | ₹ 15,25,382.02 |
| 5 | ₹ 20,27,590.31 |
Corpus from Rs 20,27,590 amount
Now, if we do not redeem the investment and let it grow for another 25 years.
Here's how it can grow to an estimated over Rs 3.44 crore.
In 25 years, capital gains will be Rs 3,24,41,571, while the estimated corpus will be Rs 3,44,69,161.
| Year | Yearly capital gains | Corpus |
| 1 | ₹ 2,43,310.80 | ₹ 22,70,900.80 |
| 2 | ₹ 2,72,508.10 | ₹ 25,43,408.90 |
| 3 | ₹ 3,05,209.07 | ₹ 28,48,617.96 |
| 4 | ₹ 3,41,834.16 | ₹ 31,90,452.12 |
| 5 | ₹ 3,82,854.25 | ₹ 35,73,306.37 |
| 6 | ₹ 4,28,796.76 | ₹ 40,02,103.14 |
| 7 | ₹ 4,80,252.38 | ₹ 44,82,355.51 |
| 8 | ₹ 5,37,882.66 | ₹ 50,20,238.18 |
| 9 | ₹ 6,02,428.58 | ₹ 56,22,666.76 |
| 10 | ₹ 6,74,720.01 | ₹ 62,97,386.77 |
| 11 | ₹ 7,55,686.41 | ₹ 70,53,073.18 |
| 12 | ₹ 8,46,368.78 | ₹ 78,99,441.96 |
| 13 | ₹ 9,47,933.04 | ₹ 88,47,375.00 |
| 14 | ₹ 10,61,685.00 | ₹ 99,09,060.00 |
| 15 | ₹ 11,89,087.20 | ₹ 1,10,98,147.20 |
| 16 | ₹ 13,31,777.66 | ₹ 1,24,29,924.86 |
| 17 | ₹ 14,91,590.98 | ₹ 1,39,21,515.84 |
| 18 | ₹ 16,70,581.90 | ₹ 1,55,92,097.75 |
| 19 | ₹ 18,71,051.73 | ₹ 1,74,63,149.48 |
| 20 | ₹ 20,95,577.94 | ₹ 1,95,58,727.41 |
| 21 | ₹ 23,47,047.29 | ₹ 2,19,05,774.70 |
| 22 | ₹ 26,28,692.96 | ₹ 2,45,34,467.67 |
| 23 | ₹ 29,44,136.12 | ₹ 2,74,78,603.79 |
| 24 | ₹ 32,97,432.45 | ₹ 3,07,76,036.24 |
| 25 | ₹ 36,93,124.35 | ₹ 3,44,69,160.59 |
(Disclaimer: This is not financial advice. Do your own due diligence or consult an expert for financial planning.)
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