Retirement Planning via SIP: In how many years your Rs 12,345 monthly SIP investment will grow to Rs 5 crore, Rs 6 crore, Rs 7 crore corpus?
Retirement Planning via SIP: Many people begin thinking about accumulating a substantial corpus for retirement later in life. However, starting to invest early in one's career can help generate a sizable retirement corpus due to the power of compounding. If you also want to become financially independent post-retirement, you can start investing in a Systematic Investment Plan (SIP) mutual fund. In this write-up, we will show through calculations how much time it will take to generate retirement corpus amounts of Rs 5 crore, Rs 6 crore, and Rs 7 crore with a monthly SIP investment of Rs 12,345.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is SIP?
SIP is a method of investing a fixed amount regularly in mutual funds to build wealth over time through compounding.
Investment Frequency Options in SIP
With SIP, you can invest regularly—monthly, quarterly, biannually, or annually—rather than making a lump-sum investment.
Assumed Annualised Return: 12%
For all the calculations, we are assuming the annualised return of 12 per cent.
How Much Time Will It Take to Build a Rs 5 Crore Retirement Corpus with Rs 12,345 Monthly SIP?
To accumulate a retirement corpus of Rs 5 crore with a monthly SIP investment of Rs 12,345, you will need to invest 32 years.
Total Investment in 32 Years
Over 32 years, you will invest a total of Rs 47,40,480.
Estimated Capital Gain at 12% Return Rate
At an average annualised return of 12 per cent, your capital gain will amount to Rs 5,09,26,792.
Total Amount Received After 32 Years
At the end of 32 years, including both the principal investment and capital gain, the total amount will be Rs 5,56,67,272.
How Much Time Will It Take to Build a Rs 6 Crore Retirement Corpus with Rs 12,345 Monthly SIP?
To accumulate a retirement corpus of Rs 6 crore with a monthly SIP investment of Rs 12,345, you will need to invest 33 years.
Total Investment in 33 Years
Over 33 years, you will invest a total of Rs 48,88,620.
Estimated Capital Gain at 12% Return Rate
At an average annualised return of 12 per cent, the capital gain will amount to Rs 5,79,96,786.
Total Amount Received After 33 Years
At the end of 33 years, including both the principal investment and capital gain, the total amount will be Rs 6,28,85,406.
How Much Time Will It Take to Build a Rs 7 Crore Retirement Corpus with Rs 12,345 Monthly SIP?
To accumulate a retirement corpus of Rs 7 crore with a monthly SIP investment of Rs 12,345, you will need to invest 34 years.
Total Investment in 34 Years
Over 34 years, you will invest a total of Rs 50,36,760.
Estimated Capital Gain at 12% Return Rate
At an average annualised return of 12 per cent, your capital gain will amount to Rs 6,59,82,221.
Total Amount Received After 34 Years
At the end of 34 years, including both the principal investment and capital gain, the total amount will be Rs 7,10,18,981.
Important Points to Remember While Investing in SIP
It’s essential to keep in mind that SIPs are market-linked investments, meaning returns are not guaranteed. The 12 per cent return mentioned in the above calculations is an estimate, and actual returns may vary depending on market conditions.