The power of compounding kicks in only when you let it stay uninterrupted. More importantly, increasing that amount as your income grows will make a significant difference.
Many people overestimate how much they need to invest to retire comfortably, and underestimate what long-term discipline can do. Rs 40,000 is just 10% of your Rs 4 lakh income. That is possible, even with other expenses, and it still leaves room to increase your SIPs with income growth.
The Rs 5 Crore Question: Are You Investing Enough Each Month?
If you are 35 today, earning Rs 4 lakh a month, and aiming for a Rs 5 crore corpus by 55, that’s a 20-year window to work with.
“Let’s assume a reasonable long-term CAGR of 14%, which equity mutual funds have historically delivered over two decades for disciplined investors. Based on this, to build a Rs 5 crore corpus by age 55, you will need to invest around Rs 38,000 to Rs 40,000 per month consistently. If we break this down, at 12% CAGR on the conservative side, you will need to invest around Rs 52,000 per month. At 14% CAGR, the requirement drops to roughly Rs 39,000 per month. At 16% CAGR on the extreme, you could hit your target with about Rs 29,000 per month,” said Trivesh D, COO, Tradejini.
Of course, you must not pause or withdraw from the corpus midway.
Why Rs 5 Crore Won’t Be Enough in 25 Years-And How to Prepare Now
“Achieving a Rs 5 crore equity portfolio over a 25-year horizon-assuming a retirement age of 60-requires disciplined monthly investing and thoughtful diversification. Based on the historical average annual return of 14% from the Nifty 50 index, a monthly SIP of approximately Rs 18,850 can help attain this nominal target. However, when adjusting for a consistent inflation rate of 6% over the same period, the real value of Rs 5 crore today would be equivalent to approximately Rs 21.5 crore in 25 years. In other words, to retain the purchasing power of Rs 5 crore at retirement, one must target a significantly higher future corpus,” commented Abhinav Bohra, Fintech Specialist and Research Curator at an Investment Advisory Firm.
To achieve this inflation-adjusted target of Rs 21.5 crore, assuming a 14% annual return, a monthly SIP of around Rs 80,000 would be required, he added.
This approach ensures not just nominal wealth accumulation, but real financial security in retirement-accounting for the eroding effects of inflation on long-term goals. The foundation of such a journey lies in consistency, long-term vision, and a well-constructed, equity-focused portfolio.
“To build a retirement corpus of Rs 5 crore by age 60, you must consistently invest in mutual funds, starting at 35 with an income of Rs 4 lakh per month. Assuming a conservative 12% annual return, invest Rs 30000 per month for 25 years. The key isn’t chasing high returns but staying disciplined, investing early, and increasing SIPs with income. Making your money work harder-every month delayed increases the cost of your financial freedom. Retire peacefully, not regretfully,” stated Kirang Gandhi, Pune-based Financial mentor.
The Rs 5 Crore Retirement Plan: SIP Strategy for High-Income Professionals
“For a 35-year-old individual earning Rs 4 lakh per month and aiming for a retirement corpus of Rs 5 crore by age 60, the most practical and effective strategy in the current market would be to invest through mutual funds via a disciplined monthly SIP (Systematic Investment Plan). Assuming a balanced portfolio targeting an average annual return of 10% – achievable through a combination of equity mutual funds (70-80% allocation across large-cap, flexi-cap, and mid-cap funds) and debt or hybrid funds (20-30% allocation) – the person would need to start a SIP of approximately Rs 43,500 per month,” said Navin Jain, Cofounder & CEO, NeoNest Finserve.
“This amounts to around 11% of monthly income, which is quite feasible. To further strengthen the plan, it is advisable to increase the SIP amount by 5-10% annually through a Step-Up SIP, which could help reach the target even earlier. The key is to start immediately, stay invested through market cycles, review the portfolio periodically, and avoid panic during short-term market volatility. With 25 years of disciplined investing and proper asset allocation, achieving a Rs 5 crore corpus is highly realistic,” Navin Jain further added.
“Assuming, investor has another 20 years to retire, he should do 5 equity SIPs of Rs 10000 each per month in a good mutual fund from a good asset management company. His total investment per month would be Rs 50000 in this case. At a 12% rate or return on his investment, which is less than the historical rate of return of Sensex since inception, his target of creating 5 cr corpus should be achieved. Given his monthly income of 4 lacs per month, it should be relatively easy for him to spare Rs 50000 per month for creating this retirement corpus,” recommended Mr. Gaurav Goel, (Entrepreneur and SEBI Registered Investment Advisor).
Conclusion
Care should be taken that one does not fall prey to external noise during the entire investment period. He should stay disciplined, committed and maintain composure during times of distress to achieve his goal.