SIP & financial freedom calculator
Two questions, one page: what will my SIP grow to, and how much do I need to invest every month to reach financial freedom?
SIP calculator
Financial freedom: the SIP you need
How it works
A SIP adds money every month and every rupee grows with compounding. This calculator assumes each instalment goes in at the start of the month, the usual convention for Indian SIP calculators.
i = yearly return ÷ 12 ÷ 100, n = years × 12 Future value = SIP × ((1 + i)^n − 1) ÷ i × (1 + i) With a step-up, the SIP rises by that % every 12 months. Expenses then = monthly expenses × 12 × (1 + inflation)^years Corpus needed = expenses then ÷ withdrawal rate (4% ⇒ 25 × a year’s expenses) SIP needed = (corpus − what you already have, grown) ÷ the value of ₹1 a month
Example: ₹5,000 a month for 10 years at 12% grows to about ₹11.6 lakh, of which ₹6 lakh is what you put in.
Returns are an assumption, not a promise: markets go up and down, and past returns don’t guarantee future ones. Not investment advice; talk to a SEBI-registered adviser for your situation.
Questions
What return should I assume?
Use a rate you’d be comfortable planning around, and try a lower one too. The result changes a lot with the rate, which is exactly why it is worth seeing both.
What is a step-up SIP?
You raise your SIP by a fixed percentage every year, usually in line with your salary. Even 10% a year makes a large difference over a long period.
What is the 4% rule?
A rule of thumb from long-term market studies: withdrawing about 4% of your corpus a year, adjusted for inflation, has historically lasted 30 years or more. Pick a lower rate for a longer retirement or a margin of safety.