SIP Investment: Can 3K investment help you generate Rs 1 cr retirement corpus? Know calculations

SIP Investment: When we earn less, or when we save less, our excuse to not invest is what will happen even if I invest money in such small proportions. Will it give me a retirement corpus for a decent living? Let alone building a retirement corpus, will it help me achieve even my short-term financial goals? As a result, you drop the idea of investing and miss out on building any significant corpus. But that's a wrong habit. There are hundreds of investment options available in the market- market-linked and providing guaranteed returns- that can help you build a huge retirement corpus and help achieve financial freedom. Systematic Investment Plan (SIP) investment in mutual funds is one of them. The market-linked investment method provides compounding, which means, you get returns on your overall corpus, and not just on the invested amount. Even if you invest just Rs 3,000 a month and get an annualised return of 12 per cent, in the long term, you can help build a retirement corpus of Rs 1 crore. If you increase your monthly investment a little bit more, the corpus may be much more than Rs 1 crore. In this write-up, we will tell you how is it possible? 

SIP: Know what you have to do

You can start SIP investment in a mutual fund, or you can pick more than one mutual fund for monthly SIPs, even if your monthly investment amount is as low as Rs 3,000. Mutual funds have been giving huge returns for more than a year since the stock market is performing well. Since mutual fund investments are also invested in the stock market, the returns have been good for more than one year. 

SIP: How can you generate Rs 1 cr corpus with Rs 3K SIP?

Even with a Rs 3,000 monthly SIP, achieving a corpus of above Rs 1 crore is possible.

And that too if you get an annualised return of 12 per cent.

If you invest Rs 3000 monthly in a SIP for 30 years in succession, your total investment will be Rs 10.80 lakh; long-term capital gains will be Rs 95.1 lakh; and the total maturity amount will be Rs 1.05 crore.  

Though 30 years is a long period, if one starts investing at 25, they can achieve the Rs 1 crore corpus goal by the age of 55.

However, since your income in 30 years is most likely to increase by many folds, you can also increase your investment amount every year. If you also increase your investment by just 10 per cent every year, you can accumulate over Rs 1 crore corpus starting with just Rs 2000 monthly SIP too.

For that, you have to opt for step up SIP and increase your SIP amount by 10 per cent every year.

SIP: How to achieve Rs 1 cr corpus through 2K step up SIP

If you are starting a Rs 2000 monthly SIP and increasing the 10 per cent SIP amount every year, which means if you start a Rs 2000 SIP today, then your SIP exactly a year after will be Rs 2200. If you get a 12 per cent annualised return on that investment, your investment in 27 years will be Rs 29.06 lakh, your long-term capital gains will be Rs 85.69 lakh, and the maturity amount will be Rs 1.14 crore.

If you continue it for another three years and increase SIP by 10 per cent every year, then in 30 years, your investment amount will be Rs 39.48 lakh, long-term capital gains will be Rs 1.37 crore and maturity returns will be Rs 1.77 crore.