Building a ₹5 crore corpus may seem like a distant retirement goal at first, but it is achievable through consistency and the power of compounding. If you are wondering how much money you should invest every month in just mutual funds to achieve this figure, the answer actually depends on when you start.
A 25-year-old investor has 35 years to let compounding work, while someone starting at 40 has only 20 years. The size of your retirement corpus also depends on factors such as your current salary, expected annual increments, monthly expenses and future financial needs.
While some expenses may rise with age such as health insurance premium, others such as children’s education costs and EMIs may eventually reduce or end, changing how much you need to save for retirement.
Assuming a 12% annual return and a fixed monthly SIP with no increase in the investment amount over time, here’s how much money you would need to invest each month (depending on your current age) to build a ₹5 crore corpus for retirement by the age of 60.
Monthly SIP for a 25-year-old
According to calculations using the Mutual Funds Sahi Hai calculator, a 25-year old individual, who may be a few years into their career, would need to invest around ₹8,000 per month to target a ₹5 crore corpus over 35 years.
At this SIP amount, the investor would have contributed around ₹33.60 lakh over the investment period, while the corpus could grow to approximately ₹5.2 crore, assuming a 12% annual return.
Monthly SIP for a 30-year-old
A 30-year old investor, who is still considerably young, would need to invest around ₹14,500 per month to target a ₹5 crore corpus over 30 years.
At this SIP amount, the investor would have contributed around ₹52.20 lakh over the investment period, while the corpus could grow to around ₹5.12 crore, according to the MF calculator.
Monthly SIP for a 35-year-old
A 35-year old investor, who is in their mid-career, would need to invest around ₹26,500 per month to target a ₹5 crore corpus over 25 years.
At this SIP amount, the investor would have contributed around ₹79.50 lakh over the investment period, while the corpus could grow to nearly ₹5.03 crore, according to the MF calculator.
Monthly SIP for a 40-year-old
As per calculations using the Mutual Funds Sahi Hai calculator, a 40 year old individual, who is also in their mid-career, would need to invest at least ₹50,000 per month to target a ₹5 crore corpus over 20 years.
At this SIP amount, the investor would have contributed around ₹1.20 crore over the investment period, while the corpus could grow to nearly ₹5 crore.
Here’s a table with approximate figures
Please note that the figures mentioned below indicate the approximate corpus required if you are only investing in mutual funds. If you have investments in other assets, the figure may vary.
| Starting age | Investment period | Monthly SIP required | Total investment | Expected final corpus |
|---|---|---|---|---|
| 25 years | 35 years | ₹8,000 | ₹33.60 lakh | ₹5.20 crore |
| 30 years | 30 years | ₹14,500 | ₹52.20 lakh | ₹5.12 crore |
| 35 years | 25 years | ₹26,500 | ₹79.50 lakh | ₹5.03 crore |
| 40 years | 20 years | ₹50,000 | ₹1.20 crore | ₹5 crore |
Source: Mutual Funds Sahi Hai
Things to consider before building retirement corpus
If you are currently in your mid-30s and plan to retire at 60, the estimated post-retirement monthly expense in today’s value cannot be used directly. It must first be adjusted for inflation over the years leading up to retirement.
The same rule applies to every investor regardless of when they start their investment journey.
One should also understand that the above calculated figures are based on an assumed return of 12% per annum, which is not guaranteed. Investment options such as equities and equity-oriented mutual funds can go through volatile market cycles, so the actual SIP required could be substantially different if market returns are lower or higher.
So, it’s always advisable to diversify your investments across different asset classes rather than relying on a single option. A portfolio could include safer instruments such as the Public Provident Fund (PPF) and fixed deposits, alongside market-linked investments such as stocks, mutual funds and ETFs, depending on an investor’s risk appetite and financial goals.