Saving for retirement, especially if you're starting later in life, may feel overwhelming. However, even with modest beginnings, it's possible to create a substantial retirement portfolio.
One effective strategy is the Step-Up SIP, where you start with a ₹5,000 SIP and increase it by 10% every year. This approach can potentially help you reach your ₹1 crore retirement goal in just 20 years.
Let's consider Mr. Rajesh, in his mid-30s, who is concerned about not saving enough for retirement. Even though he feels he has missed the bus for aggressive savings, he can still reach a ₹1 crore retirement corpus by starting with a ₹5,000 SIP, increasing by 10% every year.
Over the course of 20 years, this strategy could turn his total investment of ₹34,36,632 into ₹99,44,645. The returns from the ₹5,000 SIP, which increase each year, would amount to ₹65,08,013, helping him meet his retirement goal. You can calculate the same with this using a step-up SIP calculator.
Here’s how the investment looks with a ₹5,000 SIP:
In 20 years, the total value of the investment could reach ₹99,44,645. Out of this, ₹34,36,632 would be the invested amount, while ₹65,08,013 would be the estimated returns, showcasing the power of compounding.
A Step-Up SIP is a systematic investment plan where you start with a fixed SIP amount, and each year, the contribution increases by a set percentage. This helps keep pace with your growing income and inflation, ensuring that your investments remain aligned with your long-term financial goals.
Read More: How to Calculate Retirement Corpus? Retirement Planning!
Starting with ₹5,000 SIP and increasing it by 10% annually could be the solution to building a ₹1 crore retirement corpus. By sticking to this strategy for 20 years, the power of compounding and regular growth in your contributions can help you achieve your long-term financial goals, even if you're starting later than you would have liked. That said, returns are subject to market performance and no returns are guaranteed.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or 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.
Investments in securities are subject to market risks. Read all related documents carefully before investing.
Published on: Aug 6, 2025, 3:57 PM IST
Team Angel One
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