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Systematic Investment Plan, the easiest, efficient way to invest in mutual funds. It allows an investor to accumulate a whopping amount with a small monthly investment.

Experts say mutual fund SIP investment for the long term lets an investor get the maximum compounding benefit. They get interest on interest that helps maximization of one's return on money. 

However, they advise investors to enhance their monthly investment using an annual step-up in SIP. When an investor does so, the investor avail more financial freedom post-retirement. 

10000/m SIP= 9 Lakh/m Pension!!

As per experts, if an investor invests ₹10,000 per month in mutual fund SIP for 30 years, he or she can accumulate around ₹12.7 crores at the time of maturity provided it has used 10 percent annual step-up.

Mutual fund investments are subject to market risk but in long term, this market risk goes down, and chances of a higher return scale are much high. So, if an investor opts for mutual fund SIP investment, then the investor would be able to start with a small amount and accumulate a big amount in long term. 

Here is what investors must keep in mind, dynamic SIP in mutual funds for the long-term works much better in accumulating corpus than a static SIP. That means one should increase one's monthly SIP with an increase in one's annual income using an annual step-up in monthly SIP amount.

How Much Return To Expect In Long-Term?

Experts say when you invest for long-term in mutual funds via SIP, like 30 years or more, you can expect at least 12 percent annual return, which may go up to 16 or maybe 17 percent as well. On average, one can expect around 15 percent return on one's mutual fund SIP investment for a 30-year long period provided the plan has been chosen properly. 

How To Invest For A 9 Lakh/m Pension?

As per the mutual fund SIP calculator, assuming 15 percent return on one's monthly SIP, if an investor starts investing ₹10,000 per month using 10 percent annual step-up and he goes on to invest for 30 years, the SIP calculator suggests that one can expect to get ₹13,18,61,316 or ₹13.19 crore maturity amount.

Here below is a picture depicting all your investment details. 

How To Decide ₹13.19 Crore To Live Post-Retirement Life? 

The matters how we should redeem the accumulated corpus so that we can use it evenly throughout our retirement. 

Well, the best option is SWP (Systematic Withdrawal Plan). They said that like SIP in the pre-retirement phase, one can opt for SWP in a post-retirement phase where putting a lump sum amount helps create regular monthly income.

On how much monthly income one can expect after investing ₹12,69,88,106 in SWP; experts say "For investing ₹12.69 crores in SWP for 30 years expecting 8 percent return per annum, one can expect a monthly income of around ₹9 lakh."

Some of the best-suggested fund schemes listed out for long-term SIP plans are:

  • SBI Small Cap Fund - Regular Growth;
  • Aditya Birla Sun Life Mid Fund - Plan-Growth Regular Plan; and
  • HDFC Top 100 Fund - Regular Plan-Growth

Keep reading our article and stay updated with the latest news about Mutual Funds!

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!


(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).