What is a Step-Up SIP?

A Step-Up SIP is an investment plan where you increase your monthly installment by a fixed percentage or amount every year, aligning with salary increments or savings capacity.

Investing

Step-Up SIP Calculator

Plan investments that grow as your salary grows, showing nominal and real future outcomes.

Calculator Inputs

Initial Monthly SIP ($)

Annual Step-Up Amount / %

Expected Annual Return (%)

Investment Horizon (Years)

Expected Inflation Rate (%)

Total Invested:$1,180,165

Estimated Gains:$2,105,617

Future Corpus (Nominal)

$3,285,782

Today's Buying Power (Real)

$1,772,320

Purchasing Power Lost

46.1%

Starting with a monthly SIP of $1,000 and increasing it by 10% every year results in a total investment of $1,180,165 over 25 years. Your nominal future balance grows to $3,285,782, which matches a purchasing power of $1,772,320 today (taking a 46.1% hit from inflation).

Step-Up SIP Growth Comparison

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Return Scenario Comparisons

Conservative (-2%)

8.0% Return

Nominal Value:$2,576,201

Real Value (Purchasing Power):$1,389,578

Purchasing Power Loss:46.1%

Expected (Base)

10.0% Return

Nominal Value:$3,285,782

Real Value (Purchasing Power):$1,772,320

Purchasing Power Loss:46.1%

Optimistic (+2%)

12.0% Return

Nominal Value:$4,275,546

Real Value (Purchasing Power):$2,306,189

Purchasing Power Loss:46.1%

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Calculation Methodology & Formulas

A Step-Up SIP is calculated by accumulating contributions month-by-month, adjusting the monthly payment value every 12 months:

For each year y:

P_y = P_y-1 × (1 + stepUp%)

Real-World Compounding Projections

10% Step-Up vs Static SIP

Starting with a $1,000 monthly SIP at 10% return over 20 years gives a corpus of $765,654. Stepping it up by 10% each year increases the final corpus to $1,595,296.

Frequently Asked Questions (FAQ)

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