Most answers to this question are useless. “Invest 20% of your salary.” “Start with ₹5,000.” “Invest as much as you can.”
None of these tell you whether you will actually reach your goal. A ₹5,000 SIP might be generous for one person and far too small for another, because the right number does not come from your salary. It comes from your goal.
So, instead of guessing, work backwards. Decide what you want, when you want it, and let the maths tell you the monthly amount.
Your SIP = (Future cost of your goal) ÷ (Growth factor for your time period)
Three inputs drive it:
Longer timelines shrink the monthly number dramatically. That single fact matters more than your income.
A goal that costs ₹20 lakh today will not cost ₹20 lakh in five years.
Future cost = Today’s cost × (1 + inflation rate) ^ number of years
Use these realistic inflation rates for India:
| Goal Type | Inflation to Use |
|---|---|
| General expenses, house, car | 6% |
| School and college education | 8% to 10% |
| Medical and healthcare | 10% to 12% |
| Wedding | 7% to 8% |
Education inflation runs higher than general inflation, which is exactly why most parents fall short. They plan for today’s fee, not tomorrow’s.
| Time Horizon | Where to Invest | Return to Assume |
|---|---|---|
| Under 3 years | Debt, arbitrage, liquid funds | 6% to 7% |
| 3 to 5 years | Hybrid or conservative equity | 9% to 10% |
| 5 to 10 years | Diversified equity funds | 11% to 12% |
| Over 10 years | Equity, with mid and small-cap exposure | 12% |
Never assume 15% or 18% just because a fund showed that in the past. Plan conservatively, then treat anything extra as a bonus.
Target today: ₹20 lakh down payment
Inflation: 6% on property
Future cost in 5 years: ₹26.76 lakh
Horizon: 5 years, so a hybrid or conservative allocation at 10%
Required SIP: approximately ₹34,300 per month
That number shocks most people. Yet the reason is simple. Five years gives compounding almost nothing to work with. Out of the ₹26.76 lakh, roughly ₹20.6 lakh comes from your own contributions, and only about ₹6 lakh comes from growth.
If ₹34,300 feels impossible, you have three honest options:
Short goals demand big SIPs. There is no way around it.
Target today: ₹15 lakh for a professional degree
Inflation: 8% on education
Future cost in 15 years: ₹47.58 lakh
Horizon: 15 years, so equity at 12%
Required SIP: approximately ₹9,430 per month
Notice the difference. A far bigger future target than the house goal, yet a much smaller monthly SIP. Time did the heavy lifting.
Start three years earlier, when your child is born rather than at age three, and the maths improves again:
| Start When Child Is | Years Available | Future Cost | Monthly SIP |
|---|---|---|---|
| Newborn | 18 years | ₹59.94 lakh | ₹7,831 |
| 3 years old | 15 years | ₹47.58 lakh | ₹9,430 |
Three years of delay costs you about ₹1,600 extra every month for the rest of the plan. For more on building this corpus, see our guide on securing your child’s future with a simple investment plan.
Retirement scares people because the number looks huge. However, the method stays identical.
Current monthly expenses: ₹50,000, so ₹6 lakh a year
Inflation: 6% over 25 years
Annual expenses at retirement: ₹25.75 lakh
Corpus needed: 25 times annual expenses, which is roughly ₹6.44 crore
Horizon: 25 years at 12%
Required SIP: approximately ₹33,900 per month
Why 25 times? Because withdrawing about 4% a year from a well-built corpus has historically allowed it to last 25 to 30 years while still growing. If you expect to live longer after retiring, use 30 times instead.
Here is where the step-up SIP changes everything. Few people can start at ₹33,900. But most people’s salaries grow.
| Approach | Starting SIP | Result After 25 Years |
|---|---|---|
| Flat SIP, never increased | ₹33,900 | ₹6.44 crore |
| Step-up SIP, raised 10% yearly | ₹15,057 | ₹6.44 crore |
Increasing your SIP by just 10% every year lets you start at less than half the amount and still reach the same corpus. Since most salaries rise faster than 10%, this is realistic for almost anyone salaried. The habit matters more than the starting figure, as our piece on letting compounding work for you explains.
| Duration | Total Invested | Value at 12% |
|---|---|---|
| 5 years | ₹3,00,000 | ₹4.12 lakh |
| 10 years | ₹6,00,000 | ₹11.62 lakh |
| 15 years | ₹9,00,000 | ₹25.23 lakh |
| 20 years | ₹12,00,000 | ₹49.96 lakh |
| 25 years | ₹15,00,000 | ₹94.88 lakh |
| 30 years | ₹18,00,000 | ₹1.76 crore |
Look at the last two rows. Five extra years of the same ₹5,000 adds more than ₹80 lakh. That is compounding doing its best work at the very end, which is also why pausing a SIP late in the journey hurts far more than pausing it early.
Goal maths only works if the foundation holds. Therefore, sort these first.
1. Build an emergency fund: Keep six months of expenses in a liquid fund or sweep-in FD. Without it, the first medical bill or job gap forces you to redeem your long-term SIPs at the worst possible time.
2. Clear high-interest debt: A credit card charging 36% or a personal loan at 15% will beat any 12% return. Pay those off first, then start investing.
Add up the SIPs for all your goals. If the total exceeds your surplus, do not abandon the plan. Instead, prioritise.
The popular rule suggests 50% of income to needs, 30% to wants, and 20% to savings. It makes a decent starting checkpoint, especially for a first job.
That said, it has a flaw. It tells you what you can invest, not what you need to invest. Someone saving 20% might still fall far short of retirement, while someone saving 12% with a 30-year runway might be comfortably on track.
So use the percentage rule to check affordability. Use goal maths to check adequacy. You need both.
Your calculation is a snapshot, not a verdict. Each year, check three things:
Skipping this review is one of the common SIP mistakes that cost investors lakhs.
Enough is not a percentage of your salary. Enough is the amount that gets you to a specific goal by a specific date.
Run the three steps for each goal you have: adjust the cost for inflation, pick a return that matches your horizon, then work backwards to the monthly figure. You may not afford the full amount immediately, and that is fine. Start with what you can, step it up every year, and keep going.
Want help mapping your goals to the right funds and SIP amounts?
Speak to the MunafaWaala team for a plan built around your timeline and risk comfort.
1. How much SIP should I do per month?
It depends on your goal, not your salary. Calculate the future cost of each goal, then work backwards using an expected return of 10% to 12% for long-term equity.
2. Is ₹5,000 per month enough for SIP?
It is enough to start. Over 20 years at 12%, ₹5,000 monthly grows to roughly ₹50 lakh. For bigger goals, increase it every year.
3. What percentage of salary should go into SIP?
Many investors target 20% to 30% of income. Use this only as an affordability check, then confirm the amount actually covers your goals.
4. How much SIP is needed for ₹1 crore?
About ₹10,000 per month for 20 years at 12%, or roughly ₹5,300 per month for 25 years. A longer horizon cuts the monthly amount sharply.
5. Should I increase my SIP every year?
Yes. A 10% annual step-up lets you start at less than half the amount and still reach the same corpus.
6. Can I change my SIP amount later?
Yes. You can increase, reduce, pause, or stop a SIP anytime. Many fund houses also offer an automatic step-up facility.
Disclaimer: Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
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