Power of 14% SIP Returns: How much money you need to invest in SIP/month to generate Rs 2.5 crore retirement corpus in 22 years

- Flexibility in investment - Rupee cost averaging  - Power of compounding

Compound growth is a process in which you get growth on growth. That means you will earn capital gain not only the principle amount but also on the accumulated capital gain from previous periods.

In this write-up, we will calculate how much money you need to invest in SIP each month to generate a Rs 2.5 crore retirement corpus in 22 years -

For all calculations, we are assuming an annualised return rate of 12 per cent.

According to the calculations, you will need to invest at least Rs 21,200 in SIP mutual funds to build a wealth of around Rs 2.5 crore in 22 years. 

In 22 years, you will invest a total of Rs 55,96,800 in the SIP.

With a monthly SIP investment of Rs 21,200, your expected capital gain will be around Rs 1,94,39,002.

Consequently, at the end of 22 years, including the principal investment and capital gain, you will get a total of Rs 2,50,35,802.

Total Investment Amount: 55,96,800 Capital Gains: Rs 1,94,39,002 Total Approx. Return: Rs 2,50,35,802

It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.

If the annualised return rate is 13 per cent, the expected capital gain will be around Rs 2,30,94,601 in 22 years and the final corpus will be Rs 2,86,91,401.

If the annualised return rate is 14 per cent, the expected capital gain will be around Rs 2,73,19,071 in 22 years and the final corpus will be Rs 3,29,15,871.

If the annualised return rate is 15 per cent, the expected capital gain will be around Rs 3,22,00,810 in 22 years and the final corpus will be Rs 3,77,97,610.