Ultimate Financial Calculator
Plan your retirement corpus and post-retirement withdrawals with precision. Factoring in inflation, salary growth, and market returns for Indian professionals.
What is a Step-Up SIP?
A Step-Up SIP is a smart investment strategy where you increase your SIP contribution annually. This aligns investments with salary hikes, boosting the power of compounding to build a much larger retirement corpus compared to a fixed SIP.
What is an SWP?
An SWP (Systematic Withdrawal Plan) is the reverse of a SIP. It allows you to withdraw a fixed sum from your mutual funds at regular intervals, creating a steady, tax-efficient cash flow, ideal for retirees to cover monthly expenses.
How Inflation Impacts Returns
Inflation is the silent wealth-eater. A 6% inflation rate erodes purchasing power. When planning for retirement, it’s crucial to calculate the *inflation-adjusted corpus* to see the real future value of your money and ensure a comfortable lifestyle.
Frequently Asked Questions
What is a Step-Up SIP?
A Step-Up SIP (Systematic Investment Plan) is a method of investing in mutual funds where you increase your SIP amount periodically, usually annually. This increase is typically aligned with your salary growth, allowing you to invest more as you earn more, which significantly accelerates your wealth creation and helps in building a larger retirement corpus.
What is an SWP (Systematic Withdrawal Plan)?
An SWP (Systematic Withdrawal Plan) is a facility offered by mutual funds that allows you to withdraw a fixed amount of money from your investment at regular intervals (e.g., monthly). It’s the opposite of a SIP and is commonly used by retirees to create a regular cash flow from their retirement corpus.
How does inflation affect my retirement corpus?
Inflation erodes the purchasing power of your money over time. A retirement corpus of ₹1 Crore today will not have the same value after 20 years. For example, at 6% inflation, its real value would be less than ₹30 Lakhs. It is crucial to factor in inflation to understand the *real* value of your future corpus and ensure it’s enough to maintain your lifestyle.
Why is a Step-Up SIP better than a fixed SIP?
A Step-Up SIP is generally better because it aligns your investments with your growing income. By increasing your investment amount each year, you harness the power of compounding more aggressively. This small annual ‘step-up’ can lead to a substantially larger final corpus compared to a fixed SIP over the same period.