What a five-year delay costs a ₹10,000 monthly SIP

One idea, in numbers

A monthly SIP of ₹10,000 that stops at the same date, but starts five years later, ends with a lot less than the arithmetic of "five years' fewer instalments" suggests. The early years do most of the work because they have the longest to compound.

The tables below are arithmetic, not forecasts. They assume a fixed annual return compounded monthly, with each ₹10,000 invested at the start of the month, and no tax or fees. The rates (8%, 10%, 12%) are round assumptions and not a prediction of what any fund will earn.

Same end date, different start

Say the goal is the date you turn 60. Starting at 25 gives 35 years of SIP; at 30, 30 years; at 35, 25 years; at 40, 20 years.

At 12%, the five years between 25 and 30 cost ₹2.97 crore of final corpus and saved only ₹6 lakh of contributions. Starting at 40 instead of 25 more than halves the investment total (₹24 lakh against ₹42 lakh) but leaves under a sixth of the final sum (₹99.9 lakh against ₹6.50 crore).

The lower the return, the smaller the penalty. At 8%, a five-year delay costs ₹81 lakh. The cost grows with the rate because that is what compounding does.

The catch-up bill

The usual reply is to invest more later. How much more?

At 12%, a five-year delay means a monthly SIP 84% higher to arrive at the same place. A ten-year delay means 3.4 times the amount. Catching up is possible, but it needs a bigger share of income, and income is exactly what is scarce early on.

Two things the tables hide

Returns are not smooth. The numbers assume the same return every year. Real equity returns do not arrive that way. Our October SIP post shows 3-year SIPs in the median large-cap fund at 0.34% a year, and small caps at 10.42%. Long SIPs average through that, but a short one may not. The case for starting early is the arithmetic of time. It is not a promise of 12%.

The first instalment does not have to be big. A ₹2,000 SIP started now is a habit; a ₹10,000 SIP started in five years is a plan. A step-up helps close the gap: raising the SIP each year as pay rises. See step-up SIPs and the step-up calculator.

Check your own numbers

The SIP cost of delay calculator lets you change the amount, the return and the delay. The SIP calculator gives the plain future value, and how long to build ₹1 crore with a SIP works backwards from a target.

None of this is a recommendation of any fund, rate or amount. It shows why the start date matters as much as the monthly figure.