SIP works on the power of compounding, meaning your money grows not just on what you invest but also on the returns you earn over time. The longer you invest, the bigger your money grows. Even small amounts invested regularly can turn into a large sum over the years. With patience and discipline, SIP can help you achieve your financial goals and secure a comfortable retirement. Therefore, let’s find out how much you need to invest every month through a SIP to build a Rs 1 crore retirement corpus by starting at age 30.

What is Systematic Investment Plan

A Systematic Investment Plan (SIP) is a simple way to invest a fixed amount of money regularly in mutual funds. You can choose to invest daily, weekly, monthly, quarterly, or yearly, whichever suits you best.

Why should you go for SIP?

SIP is a great way to start investing with as little as Rs 100. Plus, it’s easy to handle as your investments are deducted automatically, so you will never miss a payment.

Why early investment is beneficial?

Let’s understand it through an example.
Rahul starts investing Rs 1,000 per month at age 20.
After 40 years, he gets an estimated Rs 1.18 crore.

His friend, Rohan, starts investing Rs 1,000 per month at age 30.
After 30 years, he gets Rs 35 lakh.

Rahul started 10 years earlier and got 3 times more returns.

SIP calculation condition

We are assuming a 12 per cent annualised return rate. 
Target corpus: Rs 1 crore
Let’s find out what should be your monthly SIP amount.

How long it will take to create a corpus of Rs 1 crore?

It will approximately take 25 years to generate Rs 1 crore retirement corpus.

How much money to put in monthly SIP to build Rs 1 crore retirement corpus starting at age 30?

If you want to build a corpus of Rs 1 crore by the age of 55, starting at 30 (in case you are planning for early retirement), you need to invest Rs 6,000 in a monthly SIP. Alternatively, if you aim to create Rs 1 crore by 60, your monthly SIP investment would be Rs 3,300. In this article, we will show the calculations of Rs 6,000 monthly SIP.

How much can Rs 6,000 monthly SIP build in 10 years?

The investment amount will be Rs 7,20,000, the estimated capital gains will be Rs 6,24,215, and the estimated retirement corpus will be Rs 13,44,215. 

How much can Rs 6,000 monthly SIP build in 20 years?

The investment amount will be Rs 14,40,000, the estimated capital gains will be Rs 40,79,144, and the estimated retirement corpus will be Rs 55,19,144.

How much can Rs 6,000 monthly SIP build in 25 years?

The investment amount will be Rs 18,00,000, the estimated capital gains will be Rs 84,13,239, and the estimated retirement corpus will be Rs 1,02,13,239.

(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)