Your ₹3 Crore Retirement Plan is Here.
A 15-Year SIP Strategy for 45-Year-Olds

Nowadays, retirement planning is an essential component of every financial strategy.  An individual needs to adopt a systematic approach to ensure they can sustain their economic independence and keep pace with the constantly rising lifestyle expenditures, as life expectancy has increased due to technological advancements and rising healthcare costs.

With a monthly salary of Rs 3 lakhs, a 45-year-old professional hopes to accumulate Rs 3 crore for retirement when he is 60. This goal is completely attainable for beginners using Systematic Investment Plans (SIPs), a disciplined mutual fund investment strategy.

A disciplined SIP method might be quite successful for a 45-year-old who earns Rs 3 lakh per month and wants to save Rs 3 crore for retirement in 15 years, according to Finance Experts. SIPs of Rs 1.07 lakh to Rs 1.45 lakhs (approx.) per month would be required if an annual return of 12–14% were assumed, which is reasonable for equity-oriented mutual funds over the long run. However, it's crucial to remember that 3 Cr. of retirement corpus is small in relation to income.

It is expected that as income rises, so do lifestyle improvements. The life expectancy has increased from 75 to 85 years due to advancements in healthcare and technology. Therefore, based on current values, the optimal retirement corpus in the example below should be between 5 and 10 crore. Even though we have computed a Rs 3 crore SIP, it is important to reassess your retirement objectives in light of anticipated longevity, inflation, and lifestyle.

Scenario No.1

Calculation For Rs 3.0 Cr Goal in 15 Years

Scenario No.2

Calculation For Rs 3.0 Cr Goal in 15 Years

Considering the salary level, it makes sense to set aside 35%-45% of monthly income for retirement SIPs, which is quite high. Hence, we recommend starting a step-up SIP for retirement. You can increase the SIP by 5% to 10% per year as per your needs. This will help you achieve the required corpus in less than 15 years or you can create more corpus in 15 years.

It is beneficial to invest in a combination of Large-Cap, Flexi-cap, and multi-cap funds in order to diversify across market circumstances. Large-cap will give you stability in the portfolio. While multi-cap funds maintain a balanced allocation to large, mid, and small-cap companies, guaranteeing risk-adjusted returns, flexi-cap funds respond to market opportunities across capitalizations.

This diversified SIP approach aligns with both growth and risk mitigation objectives.

The Optimum SIP Strategy for Late Beginners:

According to experts, the monthly SIP would be determined by the person's level of risk tolerance. A more balanced approach is required because he will be retiring in 15 years. As a result, the corpus can be increased by investing in hybrid and multi-asset funds, which typically yield returns of 9% to 12% annually. He would need to invest about Rs 0.73 lakh every month if the investments yielded a 10% return over the course of the 15 years. 

Considering the total monthly income of Rs. 3 Lakhs, almost 24% of the monthly income is set aside for this, even with a Rs 0.73 lakh SIP, leaving nearly Rs 2.25 lakhs for emergencies and other costs. It is always advised to have sufficient health and life insurance coverage and to keep an emergency fund that covers six months' worth of expenses.

This enables the investor to efficiently and optimally construct a retirement fund when paired with yearly reviews and disciplined investing.

You should consider your risk appetite before starting SIP. Different returns are expected from different types of SIPs. As mentioned earlier, hybrid and multi-asset funds typically yield returns of 9% to 12% annually. On the other hand, Equity Multi-cap/Flexi cap can offer returns up to 14% p.a.

Think Rs 0.73 Lakh SIP Is Too Much? Step-Ups Could Cut It Down:

With a modest 5% annual SIP step-up, the required starting SIP drops to around Rs 65000; with a 10% step-up, it can start at just Rs 52,000. With this magical strategy, you will be able to achieve your desired corpus even if, at present, you cannot invest the entire amount.

If you delay your investing, you need to invest a larger amount every month. Further, set your retirement corpus target realistically. Consider inflation, current expenses, income, and liabilities to account for. 

The key is consistency-start now, stay invested, and let compounding do the rest.