Question 1

How much SIP do I need to build a retirement corpus?

Accepted Answer

The SIP amount depends on your target corpus, time to retirement, and expected return. For example, to build ₹2 crore in 25 years at 12% return, you need a monthly SIP of approximately ₹12,500. Starting earlier dramatically reduces the monthly amount needed due to compounding.

Question 2

How much corpus do I need for retirement at 60 in India?

Accepted Answer

For a comfortable retirement with ₹50,000/month expenses today, at 6% inflation you'd need about ₹90,000-1 lakh/month at 60. Using the 4% withdrawal rule, this requires a corpus of approximately ₹2.5-3 crore. If you have other income sources (pension, rent), the required corpus is lower.

Question 3

What return rate should I assume for retirement SIP planning?

Accepted Answer

For long-term retirement SIP (15+ years) in equity mutual funds, 10-12% p.a. is a conservative assumption based on Nifty 50 historical returns. For shorter periods (under 10 years), use 8-10%. Do not use more than 12% for planning, higher estimates can lead to under-saving.

Question 4

How does step-up SIP help build a retirement corpus faster?

Accepted Answer

A step-up SIP increases your monthly investment by a fixed percentage (usually 10%) every year, matching your salary growth. Starting with ₹10,000/month with 10% annual step-up can build 40-50% more corpus than a flat ₹10,000 SIP over 20-25 years. This is more practical than starting with a higher flat SIP amount.

Question 5

What is the right asset allocation for retirement SIP?

Accepted Answer

During the accumulation phase (20-30 years before retirement): 70-80% in equity funds, 20-30% in debt funds. In the last 5 years before retirement, gradually shift to 50% equity and 50% debt to protect gains. At retirement, keep 30-40% in equity for inflation-beating growth and 60-70% in debt for stability.

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