₹10,000 SIP vs Step Up SIP: How Your Retirement Corpus Can Rise From ₹1.90 Crore to Over ₹3 Crore?

Building a retirement corpus is often less about starting with a very large amount and more about allowing regular investments enough time to compound.  

A monthly SIP can illustrate this clearly. The difference becomes even more noticeable when the SIP amount rises gradually with income over the years. 

Starting with ₹10,000 SIP; What Would be the Retirement Corpus after 25 Years?  

Consider a person who is currently 35 years old and plans to retire at the age of 60. This leaves an investment period of 25 years. 

SIP Amount: ₹10,000 every month 

Expected Rate of Return: 12% Annualised  

No. of Years: 25 Years  

Over 25 years, the total amount invested would be ₹30,00,000. 

At an assumed annualised return of 12%, the estimated value at the end of 25 years works out to approximately ₹1,89,76,351, or about ₹1.90 crore. The number is derived by using an SIP calculator.  

How a 7% Step Up SIP Changes the Retirement Corpus? 

One way to understand the effect of increasing investments over time is through a step up SIP. 

Instead of investing the same ₹10,000 every month for the entire 25 years, assume the monthly SIP is increased by 7% every year. 

The SIP would start at ₹10,000 per month during the first year. In the second year, the monthly contribution would rise to ₹10,700. It would continue increasing by 7% each year for the remaining investment period. 

Assuming the same 12% annualised return, the estimated retirement corpus after 25 years would rise to approximately ₹3,23,74,103, or about ₹3.24 crore. 

The total amount invested over the period would be approximately ₹75,90,576. 

The estimated return generated over the investment period would be around ₹2,47,83,527. 

Fixed SIP Versus vs 7% Step Up SIP: Know the Difference 

The difference between the two examples becomes clearer when the final numbers are viewed together. 

With a fixed monthly SIP of ₹10,000, the total investment over 25 years is ₹30 lakh and the estimated corpus is about ₹1.90 crore. However, with an annual 7% step up SIP starting at ₹10,000 per month, the total investment rises to approximately ₹75.90 lakh and the estimated corpus reaches approximately ₹3.24 crore. 

That represents a difference of roughly ₹1.34 crore in the estimated final corpus. 

The comparison also highlights an important point. The additional corpus is not created merely because the SIP amount is increased. A much larger amount of personal capital is also being invested over the 25 year period. 

Read More: SIP Calculator: How SIP Can Help You Build a Retirement Corpus of Over ₹5 Crore by Age of 60? 

Conclusion 

SIP of ₹10,000 per month continued for 25 years can potentially create a retirement corpus of around ₹1.90 crore at an assumed annualised return of 12%. 

When the same starting SIP is increased by 7% every year, the estimated retirement corpus rises to approximately ₹3.24 crore.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.    
 
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.