SIP Step-Up: The Most Underused Wealth-Building Lever

# SIP Step-Up: The Most Underused Wealth-Building Lever Most investors start a ₹5,000/month SIP and forget about it for five years. The problem: inflation erodes the real value of your contribution over time, and your salary has probably grown. ## What Is a Step-Up SIP? A step-up (or top-up) SIP automatically increases your monthly contribution by a fixed percentage each year. Most AMC platforms support this. A 10% annual step-up is the standard recommendation. ## The Numbers Assume ₹10,000/month starting SIP, 12% CAGR, 20-year horizon: - **Without step-up:** ₹10,000/month → ₹98L corpus - **With 10% annual step-up:** Year 1: ₹10K, Year 2: ₹11K, Year 3: ₹12.1K... → ₹2.9 crore corpus The same 12% return assumption produces a 3x difference in outcome. ## Why 10%? Average salary growth for Indian professionals is 8–12%/year. Targeting 10% SIP step-up ensures your investment rate grows at least in line with income. You do not feel the increase — it comes from the raise. ## Implementation Most AMCs (Zerodha Coin, Groww, MF Central) allow step-up SIPs at setup. If your AMC does not support it, calendar a yearly reminder to manually increase the SIP. ## The Compounding Effect The power is not just in the higher amount — it is in the timing. Early years of wealth-building have the longest compounding runway. A rupee invested at age 30 is worth far more than one invested at 40.