Worked ExampleHand-crafted
What is the cost of delaying retirement savings by 5 years?
Scenario
Same Anand as above, but starts saving at 35 instead of 30 — same ₹13.12 crore target at age 60
Inputs
- Target corpus INR
- 13,12,00,000
- Assumed return %
- 12
- Years remaining at start 30
- 30
- Years remaining at start 35
- 25
Calculation
- 1.
Monthly SIP if started at 30 (30 years)
₹13.12 Cr ÷ 3497 → ₹37,500
- 2.
Monthly SIP if started at 35 (25 years)
₹13.12 Cr ÷ 1888 → ₹69,500
- 3.
Monthly SIP increase from 5-year delay
₹69,500 − ₹37,500 → ₹32,000
- 4.
Total nominal additional contribution over 25 years
₹32,000 × 12 × 25 → ₹96.00 L
Conclusion
A 5-year delay roughly doubles the required monthly SIP — from ₹37,500 to ₹69,500. The cost of delay is ₹32,000/month for the next 25 years.
Tradeoffs
The delay cost compounds non-linearly: 10-year delay (starting at 40) requires ₹1.30 lakh/month, 15-year delay requires ₹2.62 lakh/month. Each subsequent 5-year delay roughly doubles the burden again.