- Start retirement planning at 40 for significant wealth.
- Rs 15,000 SIP with 10% step-up yields Rs 3 Cr.
- Calculate expenses considering inflation for future financial needs.
Starting an investment journey at an early age is the best gift you could give yourself. However, wealth creation opportunities do not end if you are willing to be a persistent investor against all odds, even if you are in your forties. At 40, you still have 20 years to build a significant retirement corpus by the age of 60. However, you need to put in a relatively high monthly investment as compared to a 20- 25-year-old investor. You need to have a step-up strategy as well.
Let’s assume starting a monthly SIP of Rs 15,000 with a 10 per cent step-up every year for the next 20 years. With an expected return rate of 12 per cent per annum for the period, you can accumulate a corpus of approximately Rs 3 crore over the next 20 years. Meanwhile, if you avoid a step-up of 10 per cent, you still could create a corpus of around 1.5 crore.
Retirement Planning Through SIP: Rs 15,000 SIP Calculation
Rs 15,000 SIP Without Step Up
- Monthly investment: Rs 15,000
- Investment period: 20 years
- Total deposit amount: Rs 36 lakh
- Expected Return Rate: 12 per cent
- Accumulated Fund: Approximately Rs 1.50 crore
If you are a little cautious and do not want to expose yourself to high-risk equity funds and expect a 10 per cent annualised return for 20 years, you could accumulate Rs 1.15 crore.
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Rs 3 Crore With 10% Step-up
Without a step-up, a Rs 3 crore corpus with a fixed Rs 15,000 will not be possible. A 10 per cent step-up strategy could help to achieve the goal.
- Starting age: 40 years
- Investment period: 20 years
- Initial monthly SIP: Rs 15,000
- Step-up SIP: 10 per cent
- Estimated annual return: 12 per cent
- Potential corpus by age 60: Rs 3 crore
Calculate Expenses in Line with Inflation
If you have monthly expenses of Rs 30,000 in 2026, then with an estimated 6 per cent inflation rate, this could be 96,000 per month after 20 years. Therefore, a large corpus at the time of retirement could cover the expenses.
Disclaimer: This story is for informational purposes only. It should not be considered as investment advice. Please seek expert advice before investing.