Starting SIP at 25 vs 35: How a 10-year delay can shrink your retirement corpus by nearly ₹25 lakh

Delaying your SIP by a few years may not feel like a big decision at first, but it can make a huge difference to the wealth you build by retirement. The longer you wait to start investing, the less time your money gets to benefit from the power of compounding.

For mutual fund investors, time is one of the biggest advantages. Starting early allows your money to stay invested for longer, giving it more time to grow and generate additional returns. Over the long term, even a modest monthly SIP can grow into a sizeable retirement corpus simply because it had more years to compound.

But how much difference can starting early actually make? To understand this better, let’s compare how much wealth an investor could accumulate by the age of 60 by starting the same SIP at age 25 versus waiting until age 35.

What is the cost of delay?

The cost of delay is the potential wealth an investor misses by delaying investments. Every year you delay reduces the time your money has to grow through compounding. As a result, your investments not only have fewer years to earn returns, but also miss the chance to generate additional returns on gains they could have made earlier.

Put simply, delaying a SIP is not just about skipping a few monthly investments. It means giving up valuable years during which compounding could have quietly worked in your favour, and over time, that can make a surprisingly big difference to your final corpus.

Understanding the cost of delay through an example

Consider two investors who both invest ₹1,000 every month in an equity mutual fund through a SIP. Both expect an annual return of 10% and continue investing until age 60.

The only difference between them is when they start investing.

The first investor begins investing at the age of 25 and continues the SIP for the next 35 years. During this period, the investor contributes a total of ₹4.20 lakh. Assuming a 10% annual return, the investment grows to an estimated ₹37.97 lakh, resulting in total gains of ₹33.77 lakh over the invested amount.

The second investor starts the same SIP at age 35 and continues it till age 60. The total investment is ₹3 lakh, which grows to an estimated ₹13.27 lakh, yielding total gains of ₹10.27 lakh.

The potential wealth lost by delaying the SIP amounts to nearly ₹24.70 lakh.

The shows that investing just ₹1.20 lakh more over an additional 10 years can translate into an extra corpus of around ₹24.70 lakh by the age of 60. The difference is driven far more by time than by the additional investment amount itself.

While the calculations assume an annual return of 10% and actual mutual fund returns are market-linked, it highlights an important lesson in retirement planning. Starting early gives compounding more time to work.

Even a modest SIP can grow into a significantly larger retirement corpus when investments remain in the fund for longer. For investors planning their retirement, starting a SIP early can be crucial to building long-term financial security.

Disclaimer: This is purely for educational/ informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.