Client Profile
👤Rahul (25), MBA grad, Marketing Professional
📍Location: Pune
🎯Goal: Early Retirement at 45
💡Plan Horizon: 20 years to retirement, 40 years of retired life
Rahul’s Financial Snapshot
| Details | Values |
|---|---|
| Monthly salary (post-tax) | ₹1.1 lakh |
| Monthly expenses | ₹40,000 |
| Annual lifestyle + misc. costs | ₹6 lakh |
| Retirement age | 45 |
| Life expectancy | 85 |
| Investment return (pre-retirement) | 15% |
| Investment return (post-retirement) | 6% |
| Inflation (pre & post retirement) | 6% |
Retirement Corpus Required
Using these assumptions, Rahul’s financial planner calculated:
Required Corpus at 45: ₹6.15 Crore
This is the amount needed for Rahul to sustain his lifestyle for 40 years, factoring in inflation, healthcare, and basic quality of life.
Two Investment Strategies
Option 1: Fixed SIP
- Start a SIP of ₹46,000/month right away
- Grows to ₹6.15 Cr in 20 years
- Leaves little room for emergencies or discretionary spending now
Option 2: Step-Up SIP (Recommended)
- Start with ₹27,000/month SIP
- Increase SIP by 10% every year to match salary hikes
- Less pressure in early career
- Builds the same ₹6.15 Cr corpus
- More cash flow flexibility during early working years
| Year | SIP Amount (10% Step Up) |
|---|---|
| Year 1 | ₹27,000 |
| Year 2 | ₹29,700 |
| Year 3 | ₹32,670 |
| … | … |
| Year 20 | ₹1,65,000+ |
Why Step-Up SIP Works Better
- Matches career growth: Invest more as income increases
- Less pressure early on: Start lower, stay consistent
- Higher final corpus: Thanks to compounding and rising contributions
- Better financial planning: You’re not stretched too thin in your 20s
Realization: It’s Not Just About a Number
- Inflation is your biggest enemy
- Real returns matter more than just absolute numbers
- Flexibility in investing is key to staying disciplined
- Failing to plan = Planning to fail (especially for retirement)
Summary
| Traditional SIP | Step-Up SIP |
|---|---|
| High amount upfront | Lower entry point |
| Might feel like a burden | Grows with your income |
| Same end goal | Same or even better corpus |
“There is no fixed amount for retirement — it’s your lifestyle, your time horizon, and your investment plan that determine the number.”