SIP of Rs 5,000: Know how it can help you to get a pension of Rs 1.5 lakh
If you do a SIP (Systematic Investment Plan) of Rs 5,000 for a sufficiently long duration, you an get Rs 1.5 lakh after retirement for a number of years. If that sounds incredible, think again. And read on.
Kolkata: "There is a tide in the affairs of men, Which, taken at the flood, leads on to fortune..." This timeless line of William Shakespeare from Julius Caeser can be easily applied to mutual fund SIPs. Else, how do you explain a situation where a person aged 30 can invest Rs 5,000 every month for 30 years and then from the age of 60, proceed to withdraw Rs 1.5 lakh a month, continue it for 20 years and still have a sizeable amount left. Sounds incredible? Let's look at the actual calculation. But before that see the SIP tide rising higher and higher in this country.
According to data presented by AMFI (Association of Mutual Funds in India), SIPs inflows have reached a fresh height of Rs 27,269 crore in June. This amount is 2% higher than the Rs 26,688 crore recorded in May. The SIP AUM was recorded at Rs 15.30 lakh crore in June, which is 4.7% more than Rs 14.61 lakh crore recorded in May 2025.
Build a corpus through SIP
Suppose an individual in aged 30 years. Let him/her invest Rs 5,000 in SIP every month. The individual is disciplined and continues the investment for 30 years. An SIP calculator shows that with the giant power of compounding in the long term, the small SIP amount will generate nothing less than Rs 1,76,49,596. The point to be noted is that this value will be achieved if the rate of return hits just 12%, which is not only possible but also is the template return in SIP calculators.
Withdraw through SWP
After you have reached the age of 60, it is presumed that you stop earning a salary and you also stop the Rs SIP. Now let's assume this individual begins a SWP of Rs 1.5 lakh. You keep withdrawing it till you reach the age of 80 (for the purpose of calculation). The most important point even after this high withdrawal for 20 years, you will be left with a significant amount, which will allow withdrawal for some more years. One has to merely inform the AMC the amount of money you want to withdraw and the amount will reach your designated bank account at a fixed day of every month.
Let's see the numbers. If you take an SWP calculator and type in the following:
Investment Value: Rs 1,76,49,569
SWP Amount (Monthly): Rs 1,50,000
Duration (Years): 20
Rate of Return: 10%
The SWP calculator will show the following:
Total amount withdrawn: Rs 3.60 crore
Final investment value: Rs 1.45 crore
Total interest earned: 3.28 crore
The upshot: if an individual is disciplined in pursuing mutual fund SIPs, and combines it with SWP after retirement, he/she can get a significant amount as monthly pension which can help him/her in the absence of a formal pension.
Disclaimer: (Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.)