Rs 12,500 Monthly SIP for 25 Years vs 30 Years: We often hear that long-term SIP investment planning is necessary for creating a retirement corpus that can cover our future expenses.

But how necessary it is?

What if one delays it by a few years?

Will it affect their corpus?

It may depend on the investment performance, but time plays a key role in the growth of one’s investment.

Not in the short term, but in the long term, they may fall short of many crores in their corpus compared to person who begins their investment journey a few years earlier.

Even if one invests Rs 10,000, Rs 12,000, or Rs 15,000, the gap in the corpus amount may be striking if the begin their investment journey late.

In this write-up, we will illustrate this difference through various examples. 

Calculations for the story 

For the story, we will pick monthly SIP investment and lump sum investment to show the difference of the corpus created.

Rs 12,500 monthly SIP for 25 years vs 30 years 

If one start a Rs 12,500 monthly SIP and get 12 per cent annualised return on that, in 25 years, their total investment will be Rs 37,50,000, estimated capital gains will be Rs 1,75,27,582, and the estimated corpus will be Rs 2,12,77,582.

Now if one continues the same investment for another 5 years, their investment will be Rs 45,00,000, but estimated capital gains will rise to Rs 3,40,12,165, and the estimated corpus will jump to Rs 3,85,12,165.

With an extra investment of Rs 7,50,000, the estimated corpus increased by Rs 1,27,34,583.

Target Rs 4 cr corpus through Rs 5,000 Monthly SIP vs Rs 50,000 monthly SIP

Here, we are chasing a Rs 4 crore corpus target  through Rs 5,000 monthly SIP and Rs 50,000 monthly SIP. In each case, our expected return is 12 per cent.

Through Rs 5,000 the target can be achieved in an estimated 39 years, while through the Rs 50,000 monthly SIP, it can be achieved in 19 years. 

But through the Rs 5,000, the same target can be achieved with an estimated investment of Rs 23,40,000, while in case of Rs 50,000 SIP, the estimated investment will be Rs 1,14,00,000. 

Such a vast difference happens of extra years of compound growth for Rs 5,000 monthly SIP investment. 

(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)