SIP Tips: Want a ₹1 crore fund by age 50? How much do you need to invest via SIP every month?

Everyone desires a substantial fund by the time they retire. Building a corpus of ₹1 crore by the age of 50 is an excellent financial goal. While some start investing early, others delay, missing out on the benefits of compounding. The amount you need to invest monthly to reach this goal depends entirely on when you start.

Through a Systematic Investment Plan (SIP) in mutual funds, you can invest a fixed amount every month based on your salary. Equity mutual funds have proven highly effective at beating inflation over the long term. Historical data shows that equity funds have performed impressively. For the following calculations, we are assuming a conservative average annual return of 12%.

**Benefits of Investing at Age 30**
If you start investing at age 30, you have a long span of 20 years to reach age 50. During this period, you reap the maximum benefits of compounding.

Target: ₹1 crore
Investment Tenure: 20 years
Estimated Annual Return: 12%
Required Monthly SIP: ₹10,875

**The Math of Investing at Age 35 or 40**
As the delay in starting investments increases, the required monthly SIP amount rises sharply. At age 35, you have only 15 years left, whereas at age 40, you have a mere 10 years.

Starting at age 35: For a 15-year investment period, the monthly SIP needs to be approximately ₹21,020. This is 93% higher than the amount required for someone starting at age 30.
Starting at age 40: To accumulate ₹1 crore in 10 years, you would need to invest approximately ₹46,640 per month. Here, halving the investment tenure causes the SIP amount to more than quadruple.

Ease the burden with a Step-up SIP
If you cannot commit to a large SIP amount right at the start, a step-up SIP is an excellent option. You begin with a smaller amount, and as your income grows, you can increase the SIP contribution by a fixed percentage each year. Here is the math behind building a ₹1 crore corpus with a 5% annual increase:

At age 30: Instead of a standard ₹10,875, you can start with a monthly SIP of just ₹7,850.

At age 35: An initial monthly SIP of ₹16,160 will suffice, instead of ₹21,020.

At age 40: Instead of a hefty ₹46,640, you can begin investing with ₹37,130.

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