Smart Equity Invest

SIP Planning

A SIP plan comes down to three numbers: how much, for how long, and how much more each year. The third is the one almost everyone leaves out.

Figures checked · How we calculate

₹31Lwhat ₹1 crore in 2046 buys in today's money

₹10,000 a month for 20 years at 12% becomes almost exactly ₹1 crore. At 6% inflation, that ₹1 crore in 2046 buys what ₹31 lakh buys today.

This isn't a reason to give up. It's a reason to set the target in future rupees and to raise the every year. Most SIPs are started once at a round number and never touched again.

Start from the number, not from what feels affordable

What it takes to reach ₹1 crore at 12% a year:

Years to goMonthly SIP neededYou pay inGrowth does the rest
25₹5,270₹15.8 lakh84%
20₹10,009₹24.0 lakh76%
15₹19,819₹35.7 lakh64%
10₹43,041₹51.6 lakh48%

Every five years of delay roughly doubles the monthly amount. The target stays the same. The years are what change the price.

Move these. Watch the last number.

You put in ₹12,00,000. At 12% a year you end up with

₹49,95,740

₹37,95,740 of that — 76% of the final pile — is money you never earned at a job. Nobody paid it to you. It came from the 20 years.

₹0₹12L₹25L₹37L₹50L0369121518
What it became What you paid in

Set the goal in future rupees

A goal written as "₹1 crore for retirement" is a goal written in today's money, and it will be paid out in money worth much less. First decide what the goal costs today, then grow that figure by inflation to the year you need it:

Future cost = Today's cost × (1 + inflation) ^ years

₹31 lakh today, at 6% inflation for 20 years, is ₹1 crore in 2046. Education and healthcare have historically risen faster than 6%. For those goals, 8–10% is a more honest assumption.

A 10% step-up does more than picking the best fund

₹10,000 a month for 20 years at 12%
  • Flat ₹10,000 every month₹99.9 L₹24 lakh paid in.
  • ₹10,000, raised 10% every year₹1.99 Cr₹68.7 lakh paid in, most of it in the later years.
  • What the step-up added₹99.0 LAbout as much again as the whole flat SIP was worth.

Step-up raises the monthly amount by 10% at the start of each year: ₹10,000 in year 1, ₹11,000 in year 2, about ₹61,200 by year 20. Total paid in: ₹24 lakh flat against ₹68.7 lakh stepped up.

Run the flat SIP in the calculator →

The step-up nearly doubles the result. Part of that is simply paying in more: ₹68.7 lakh instead of ₹24 lakh. The rest is that the extra money arrives while there are still years left for it to compound.

A 10% step-up is roughly what a salary increment looks like. Most fund houses and platforms let you set it once, as a "top-up" or "step-up" SIP, so it happens without a decision each year.

Stopping for a year costs far more than the year's contributions

Pausing a ₹10,000 SIP for twelve months in year 3 of 20
  • No pause₹99.9 L
  • Paused for 12 months in year 3₹90.2 L
  • What the pause cost₹9.8 LYou skipped ₹1.2 lakh of instalments. You end up ₹9.75 lakh poorer, eight times the amount you skipped.

12% a year, compounded monthly. The skipped instalments are months 25 to 36; everything else is unchanged. This assumes the skipped months earned the average return. Skipping them during a fall costs more.

Run the unpaused SIP in the calculator →

Rupee cost averaging smooths your entry. It does not protect you.

A SIP plan in five decisions

  1. Name the goal and its dateRetirement at 60, a child's college in 2040. A goal without a date cannot be priced.
  2. Price it in future rupeesToday's cost grown at 6% a year, or 8–10% for education and healthcare.
  3. Work out the monthly amountUse the SIP calculator with a 10–12% return for equity goals more than ten years away. Assume less for anything nearer.
  4. Set a yearly step-up10% a year, set once as a top-up SIP, so it happens without a decision each year.
  5. Move to safer funds in the last three yearsMoney needed within about three years should not be in equity. Shift it gradually so a crash near the finish line cannot touch it.

Put your own numbers into the SIP calculator. Before choosing a fund, read direct vs regular plans: the plan you pick can cost you more than the fund you pick.

Questions people actually ask

Figures on this page assume 12% annual returns compounded monthly, with each instalment invested at the start of the month, which is in line with long-run Indian equity history. They are not a forecast. Inflation is assumed at 6% a year. Real returns in any ten-year window have been both well above and well below 12%.