Find out how much you need to invest each month to reach your target retirement savings.
Solves the compound-growth formula backwards for the monthly contribution needed.
Monthly investment: Reverse of the SIP maturity formula
Once you have a retirement target in mind, the next question is how much to put away every month to reach it. This calculator works backwards from a target corpus, the years you have left and an expected return, and tells you the monthly investment required.
It is useful for anyone who already has a target from a financial planner, an online article or the retirement corpus calculator, and now wants a monthly number to act on. A couple in their early thirties in Kolkata might have settled on ₹5 crore for retirement. The calculator turns that distant number into a monthly SIP they can set up this week, and shows how much a higher return or a longer runway would reduce it.
1. Write down the target corpus FV, the years to retirement Y and the expected annual return R.
2. Convert to a monthly rate i = R ÷ 12 ÷ 100 and a number of months n = 12 × Y.
3. Compute the growth factor of one rupee invested every month: F = ((1 + i)^n − 1) ÷ i × (1 + i).
4. Divide the target by this factor: monthly investment = FV ÷ F.
5. If the return is zero, the formula simplifies to FV ÷ n.
6. Check the result by multiplying the monthly amount by n to see how much of the target comes from your own money.
A SIP of P rupees at the start of every month grows to P × ((1 + i)^n − 1) ÷ i × (1 + i). That expression is P multiplied by a factor that depends only on the rate and the number of months. So to reach a given future value, you simply divide by the same factor. The factor tells you how many rupees each monthly rupee becomes. At 10% for 28 years it is well above 1,000, which is why a monthly amount in the tens of thousands can reach a target in crores.
Because n sits in the exponent, the required monthly amount rises steeply as the time left shrinks. Waiting five years does not just add five years of contributions to the required amount. It removes the five years in which the earliest money would have compounded the most. In many realistic cases, starting ten years later more than doubles the monthly investment needed for the same target. This is the most practical lesson the calculator teaches, and it is worth testing with your own numbers.
The return you enter should match the mix of investments you actually plan to use. An all-equity portfolio has historically earned more over long periods than debt, but with larger ups and downs. A mix of equity funds, PPF and EPF will earn something in between. Using a high return makes the monthly figure look comfortable but risks a shortfall. Many planners reduce equity exposure in the last few years before retirement, which lowers the average return over the whole period.
Ritu and Sourav, both 32 and living in Kolkata, have set a retirement target of ₹5,00,00,000 in 28 years and expect their mix of equity funds and PPF to return about 10% a year.
Answer: Required monthly investment ₹27,088
Using a target calculated at present-day prices instead of in future rupees, which makes the monthly amount far too low.
Keeping the same monthly amount for decades even as income grows, instead of stepping it up.
Assuming the same high return right up to retirement, without allowing for a safer mix later.
Counting the same money twice, for example an EPF balance that is also part of the target.
Treating the result as final. Returns, goals and income change, so review it every year or two.
Setting up a monthly SIP for retirement.
Comparing the effect of retiring at 55 versus 60 on monthly savings.
Checking whether an existing SIP is on track for a corpus target.
Testing how much a slightly higher return would reduce the monthly amount.
Should I revisit this calculation over time?
Yes. As your goal, your timeline, or your expected return change, it is worth checking this again from time to time, rather than treating it as a one-time answer.