SIP Goals: How To Accumulate Rs 10 Crore By Retirement If You Start At 25?

Building a sizable corpus for retirement years may seem a daunting task. It needs careful financial planning and disciplined investment over the years. You can start your wealth accumulation journey with small investments instead of a large amount at once.  

For long-term financial goals like retirement funds, mutual fund systematic investment plans (SIPs) are often preferred due to higher returns, flexibility and liquidity. The SIPs allow investors to build a sizeable corpus in the long term with small investments due to the power of compounding. So, the investment horizon becomes the key to your wealth accumulation journey.

Starting early could accelerate your wealth accumulation journey via SIP investments. If you start at 25, you can get at least 35 years to build a retirement corpus by the time you reach the age of 60.

If you start your investment journey at the age of 25 with a target of building a corpus fund of Rs 10 crore by retirement, let's see how you should plan the SIP investments.

Building Rs 10 Crore Corpus Through SIP In 35 Years

Investment horizon: 35 years

Target: Rs 10 crore

Expected return: 12% per annum

Required monthly investment: Rs 15,400

Investment amount: Rs 64.68 lakh

Estimated returns: Rs 9.35 crore

Final corpus: Rs 10 crore

This shows that an investment of nearly Rs 15,400 can turn into Rs 10 crore till one retires, all due to the powerful impact of compounding.

Step-Up SIP To Build Rs 10 Crore Corpus In Shorter Tenure

Investors can also consider adopting approaches like the ‘step-up SIP' technique to reach their goal faster. For instance, an SIP of Rs 15,400 and an annual hike of 10% in the amount can help in reaching the Rs 10 crore target faster.

Calculations show that a step-up SIP at 10% per annum can help to reach a Rs 10-crore corpus in nearly 28 years, seven years earlier than the regular SIP.

To conclude, it's advisable to assess all factors related to mutual fund SIPs before making investments, as stock markets are volatile in nature. While long-term investment outlook has the potential to minimise risk, one must note that returns may not be guaranteed. Selecting the right SIP scheme should depend on your financial position and risk tolerance levels.