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.