FREEDOM / WISE
Worked Example

How much corpus does a ₹12,500 monthly SIP build over 15 years at 7.1% CAGR?

Scenario

Anjali, age 35, mid-career marketing manager in Mumbai, ₹18 lakh annual income, married with one child, ₹70K monthly household expenses

Inputs

Years
15
Inflation %
6
Monthly sip INR
12500
Expected return %
7.1

Calculation

  1. 1.

    Total invested over tenure

    ₹12,500 × 180 months → ₹22.50 L

  2. 2.

    SIP future-value factor at given rate and tenure

    [((1+r/12)^n − 1)/(r/12)] × (1+r/12) → 321.62x

  3. 3.

    Final corpus

    ₹12,500 × 321.62 factor → ₹40.20 L

  4. 4.

    Wealth multiple on contributions

    ₹40,20,301 ÷ ₹22,50,000 → 1.8x

Conclusion

₹12,500 SIP over 15 years builds approximately ₹0.40 crore — roughly 2× the principal invested through 7.1% compounding.

Tradeoffs

Assumes 7.1% steady CAGR; real Indian equity returns vary year-to-year. With 6% inflation, ₹0.40Cr in 15 years has purchasing power of roughly ₹0.17Cr in today's money. Step-up SIP (10% annual) typically adds 25-40% to terminal corpus.

More in Retirement

How does sequence-of-returns risk affect two retirees with identical average returns?

RetirementHand-crafted

Same average return over 30 years, completely different outcomes. Retiree A still has ₹4 crore after 30 years; Retiree B depleted by year 18. Early drawdowns combined with continued withdrawals can permanently impair corpus even when markets recover later.

Open worked example

How much liquid buffer does a household with ₹40L annual retirement expenses need?

RetirementHand-crafted

₹1 crore (2.5-year buffer) parked in short-duration debt MF or sweep-in savings covers early-retirement expenses without forcing equity sales during drawdowns. The ₹5.5L annual opportunity cost is the insurance premium against sequence-of-returns risk.

Open worked example

What monthly SIP does a 42-year-old with ₹70 lakh existing corpus need to reach ₹10 crore at 60?

RetirementHand-crafted

₹64,750/month SIP for 18 years closes the gap. The existing corpus does roughly half the work; the fresh contributions handle the other half. Far more manageable than the ₹1.37L/month a starting-from-zero 42-year-old would need.