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Business News/ Money / Personal Finance/  Mutual fund calculator: Your 14,500 monthly SIP can become 22.93 crore
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Mutual fund calculator: Your ₹14,500 monthly SIP can become ₹22.93 crore

Simply put, if a SIP or a Systematic Investment Plan investor starts investing at the age of 25 and continues till retirement, they will be able to invest for as long as 35 years. In this period, the investor will be able to avail compounding benefit

Mutual fund calculator: Annual step-up helps investor maximise one's compounding benefit and accumulate whopping retirement fund after starting with a small monthly investment. (Reuters)Premium
Mutual fund calculator: Annual step-up helps investor maximise one's compounding benefit and accumulate whopping retirement fund after starting with a small monthly investment. (Reuters)

Mutual fund calculator: What makes a smart investor stand out? When it comes to retirement planning or long-term investment, a smart investor manages to accumulate more money with the available investment options.

For example, a lot of people, do invest in mutual funds in the monthly SIP (systematic investment plan) mode, but how many of them are self-disciplined in their investment method and increase their monthly SIP in sync with their annual income growth?

Speaking on the benefit of annual step-up in monthly SIP, SEBI registered tax and investment expert Jitendra Solanki said, "If a SIP investor starts investing at the age of 25 and continues investing till his retirement, then he will be able to invest for long 35 years. In this period the investor will be able to avail compounding benefit. Annual step-up helps the investor maximise one's compounding benefit and accumulate whopping retirement fund after starting with a small monthly investment."

On mutual fund SIP return, which one can expect in as long as 35 years of investment, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "On can expect to get around 12 to 16% return on one's SIP for such 35-year-long period." Jhaveri said that if someone starts investing in SIP, then its goal at the time of redemption should be more than 20 crore as one needs to beat the annual inflation during and post-investment period.

So, assuming 14,500 monthly SIP at the age of 25, if an investor continues investing till he turns 60, then at 12% annual return and with 10% annual step-up, the investor will be able to accumulate 22,93,56,845 or 22.93 crore.

Source: Piggy SIP calculator
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Source: Piggy SIP calculator

Hence, this annual step-up in one's SIP has the power to help an investor retire rich or may be retire before turning 60.

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Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Published: 27 Jun 2021, 09:02 AM IST
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