SIP Returns: Retirement planning is a long-term goal where an investor starts investing when they are young and reaps benefits when they are old. One should start retirement planning early so that one has substantial savings by retirement. The other advantage of starting early is that even if one invests a small amount, their retirement corpus can be huge, specially in options offering compound interest or growth. For retirement, many people use guaranteed return investment options, while others opt for market-linked programmes. 

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One of the long-term investments can be mutual funds.

Youngsters seeking a sizeable corpus at retirement can invest in equity funds or focused funds such as retirement mutual funds.

They can also choose the systematic investment plan (SIP) method to invest in mutual funds.

Given that Nifty 50 has jumped by more than 14 per cent in the last decade, one can expect a 12 per cent XIRR (SIP returns) in a mutual fund in the long run.

In this write-up, we will tell you how much corpus you can build in 20, 25, and 30 years through SIPs worth Rs 3,000, Rs 5,000, and Rs 10,000. 

If you start investing Rs 3,000 SIP

Since one needs to invest start early for a retirement fund, one can begin at 25 years of age. If you start with a Rs 3,000 SIP per month, invest it for 20 years in a row, and get a 12 per cent return on it, then

At 45 years of age, your investment will be Rs 7,20,000, your long-term capital gains will be Rs 22,77,444, and your total expected amount will be Rs 29,97,444 (nearly Rs 30 lakh).

If you continue the same investment for another five years, i.e., for a total of 25 years, at 50, your investment will be Rs 900,000, your long-term capital gains will be Rs 47,92,905, and the total expected amount will be Rs 56,92,905.

If you stretch this investment for five years further, or for a total of 30 years, at 55 years of age, your investment will be Rs 10,80,000, long-term capital gains will be Rs 95,09,741, and the total amount will be 1,05,89,741.

If you start investing Rs 5,000 SIP

If you start investing Rs 5,000 a month through an SIP and get a 12 per cent annualised return on your investments, after 20 years, your expected amount will be- 

At 45 years of age, your investment will be Rs 12,00,000, your long-term capital gains will be Rs 37,95,740, and the total amount you will receive after 20 years will be Rs 49,95,740.

If you stretch your investment for five years more, i.e., a total of 25 years, at 50 years of age, your invested amount will be Rs 15,00,000, your long-term capital gains will be Rs 79,88,175, and your expected amount will be Rs 94,88,175.

To stay five years more into your investments, at 55 years of age, your investment through SIP will be Rs 18,00,000, long-term capital gains will be Rs 1,58,49,569, and the total amount will be Rs 1,76,49,569. 

If you start investing Rs 10,000

Here, we assume that you start investing Rs 10,000 a month through an SIP when you are 25 years old, invest it for 20 years, and get a 12 per cent annual return on the investment, at 45 years of age-

Your investment will be Rs 24,00,000, your capital gains will be Rs 75,91,479, and the expected amount will be Rs 99,91,479.

If you decide to keep investing for another five years, at 50 years of age, your investments will be 30,00,000, and long-term capital gains will be Rs 1,59,76,351, while the expected amount will be Rs 1,89,76,351.

Continuing it for another five years, i.e., a total of 30 years, at 55 years of age, your investments will be Rs 36,00,000, your long-term capital gains will be Rs 3,16,99,138, and your expected amount will be Rs 3,52,99,138. 

In all three scenarios, one common thing that you notice is that your investments grow faster with time.

This happens because of compound growth. It's a benefit to start investing early.

You get more time, and by the age of 55, you have a substantial corpus, even if you start with a Rs 3,000 monthly SIP.

(Mutual fund investments are subject to risk. Do your own diligence or consult an expert before investing your money in mutual funds.)