Building a corpus for retirement years needs careful financial planning and early investments. Staying invested over a longer horizon could help you build a sizable retirement corpus with regular investments. You can even plan early retirement with a prudent financial strategy. Recently, chartered accountant and tax expert Nitin Kaushik illustrated the financial potential of SIPs (Systematic Investment Plans) when coupled with step-up approaches, showing how meticulous and disciplined investing can result in a lifetime income stream.
In a post on X, Kaushik demonstrated how diligent investing can turn monthly amounts into a lifetime wealth machine.
In what he refers to as a "Real Wealth Example," Kaushik described the investment journey of a 35-year-old doctor who invests Rs 75,000 per month in an SIP. The investor could build a huge corpus over 20 years by using the "step-up" feature at 8% per annum, which would increase the SIP annually. According to Kaushik, assuming an 11% compound annual growth rate (CAGR), the corpus would grow to about Rs 10.5 crore.
In this example of his client, the CA illustrated that a combination of an SIP and a systematic withdrawal plan (SWP) could be useful in generating a steady income stream in retirement years.
Kaushik explained how, with 5% withdrawal per annum through SWP, one might ensure financial independence for a lifetime with a monthly amount of Rs 3 lakh after retirement over the invested corpus of Rs 10.5 crore.
🚨 Real Wealth Example
September 16, 2025
👨⚕️ Doctor Client (Age 35)
💰 SIP = ₹75,000/month
📈 Step-up = 8% yearly
⏳ Tenure = 20 years
🔄 Return = 11% CAGR
👉 Final Corpus = ₹10.5 Crore
👉 Post-retirement SWP @ 5% = ₹3 Lakh/month (till lifetime)
This is the power of systematic investing +…“This is the power of systematic investing + step-ups. Not just saving, but building a cash machine for life,” Kaushik emphasised.
The formula, he noted, is straightforward: “Earn → Invest → Grow → Withdraw sustainably.”
Mutual fund SIPs allow investors to build wealth in the long term, while minimising risks due to rupee cost averaging. Financial advisors outline that steady investments in the long term could be helpful to build a huge corpus via SIPs due to the power of compounding.
In the short term, SIPs may appear to perform poorly due to market volatility. Fearing losses, many investors panic and dilute their investments. However, by doing this, they lose out on compounding, which is one of the main benefits of SIPs. On the other hand, step-up SIPs help investors to increase mutual fund investment each year, along with a rise in income.
As per the CA, a financial strategy with step-up SIPs and SWPs could ensure a steady income for a lifetime. However, as illustrated in the example, starting an SIP with Rs 75,000 per month may appear overwhelming. It may not be possible to invest a sizable amount initially. What is important to ensure a financially secure retirement is to remain committed to an investment strategy in your employment years. You can even start with a small amount like Rs 3,000 or Rs 5,000 per month and increase it at regular intervals. It's advisable to assess different schemes and choose the most suitable SIP and SWP options as per your financial needs and risk appetite.
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