From Rs 50,000 salary to Rs 5 crore retirement corpus: How long it may take to build wealth

Building a sizeable retirement corpus from a small-amount investment may look dreamy until you know the maths. With the right investment strategy, disciplined investing, patience, and consistency, you can even build a substantial corpus from a modest salary. For instance, creating a Rs 5 crore retirement corpus on a monthly salary of Rs 50,000 may appear challenging, but one can achieve it with the right investment amount calculating the expected rate of return, time horizon, and a disciplined investment plan.

From Rs 50,000 salary to Rs 5 crore corpus: How many years it may take

A salaried person can follow two principles to gather a substantial corpus—they should invest a portion of their salary every month and also increase the investment amount with a rise in their income. If they don’t increase their investment amount with a rise in their income, achieving a retirement corpus target of Rs 5 crore can take more than three decades, even if someone invests 30% of their Rs 50,000 monthly salary in a systematic investment plan (SIP) and gets a 12% annualised return on it.


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Years to build Rs 5 crore corpus by investing 30% of Rs 50,000 monthly salary

Particulars	Amount
SIP amount	Rs 15,000
Annualised return	12%
Years to achieve Rs 5 cr corpus	31

Thirty-one years is a long time. One may not have a job for such a long time or may not give this much time to achieve their retirement goal. To fast-track the process, the other way is to increase the investment amount with a rise in your income.

For example, if the same person with a Rs 50,000 monthly salary invests 30% of their pay every month, increases their investment amount by 7% every year, and earns a 12% annualised return, a retirement corpus of Rs 5 crore can be achieved in about 26 years instead of 31. If the initial SIP is increased to Rs 17,000, the same corpus can be achieved in 25 years.

Years to reach Rs 5 crore retirement corpus

Particulars	Amount	Amount
Step-up SIP	Rs 15,000	Rs 17,000
Annual step-up (increase)	7%	7%
Annualised return	12%	12%
Years to reach Rs 5 cr corpus	26 years	25 years

Starting with a slightly higher step-up SIP amount, one can achieve the Rs 5 crore retirement corpus target in 25 years. But here comes the next big question: what percentage of your salary should you invest every month—10%, 20%, 30%, or higher? Is there a thumb rule for that?

What percentage of salary should you invest monthly?

Gurmeet Singh Chawla, Director, Master Capital Services, told ET Wealth Online that there is no fixed rule for how much of one’s salary should be invested, but he suggests setting aside at least 20-30% of monthly income for savings and investments to build long-term wealth.

“Those with bigger financial goals, like reaching a multi-crore corpus, may need to push that number higher—closer to 30-40%—as income grows over the years,” says Singh.

Vijay Kuppa, CEO, InCred Money, and Rohan Goyal, investment research analyst at MIRA Money, suggest following the 50-30-20 rule, where 50% of your take-home goes to needs, 30% to wants, and the rest, 20%, to savings and investments.

If one doesn’t have many expenses at home or doesn’t have many liabilities, they can go for a higher investment percentage, such as 50% of their salary, says Kuppa. “If you are in your 20s and live with your parents, your fixed expenses, rent, food, utilities are either zero or minimal, then instead of defaulting to the 50-30-20 split, consider investing 40-50% of your salary,” he says.

Here, is an illustration of how increasing your investment percentage from 10% to up to 50% on a monthly salary of Rs 50,000 can create significantly larger corpuses in 25 years.

Corpus in 25 years if you invest 10% to 40% of your Rs 50,000 monthly salary (at 7% annual step-up, 12% annualised return

Percentage of salary to be invested monthly	Corpus created in 25 years
10%	Rs 1.47 cr
20%	Rs 2.95 cr
30%	Rs 4.47 cr
40%	Rs 5.91 cr

But if your monthly salary is Rs 1 lakh or Rs 2 lakh and you aim to achieve a retirement corpus of Rs 5 crore given the same conditions of 7% annual step-up with an expected annualised return of 12%, you can achieve a Rs 5 crore corpus much earlier.

Assuming Rs 1 lakh/month salary, years to reach Rs 5 cr corpus at different percentages of salary (at 7% annual step-up, 12% annualised return)

Percentage of salary to be invested monthly	Years to reach Rs 5 cr corpus
10%	29
20%	24
30%	21
40%	19

Assuming Rs 2 lakh/month salary, years to reach Rs 5 cr corpus at different percentages of salary (at 7% annual step-up, 12% annualised return)

Percentage of salary to be invested monthly	Years to reach Rs 5 cr corpus
10%	24
20%	19
30%	17
40%	15

But even if two individuals of the same age and salary start their investment journey simultaneously for a Rs 5 crore retirement corpus, should they invest in the same assets, such as equity funds, or should their asset allocation be different from each other?

How will you decide asset allocation?

Kuppa says your investment choices can depend on your willingness and capacity to take a risk. “Your willingness to take a risk is emotional: can you watch your portfolio drop by 30% and not sell? Your capacity to take a risk is financial: do you have income stability, a time horizon, and the absence of near-term liabilities to absorb a loss? Both must align.”

But if you have decided the asset allocation, which investment method should you pick—a simple SIP, a step-up SIP, a lump sum, or a mix of either two or all?

SIP, step-up SIP or lump sum: Which strategy to pick?

Chawla says all three are good, but for an investor, they work in different situations.

“A regular SIP brings in the discipline of putting money in every month, stepping up that SIP amount even by a small percentage makes a surprisingly large difference to the final corpus, and when a bonus or unexpected income comes along, parking even a part of it as a lump sum can give the overall investment a solid boost,” explains Chawla.

Now, if your investment method is also in place, how sure are you of getting expected returns and achieving the retirement corpus goal in time? A periodic review of your investments can help you achieve your goal on time. If you deploy strategies through which you get returns better than expected, you can also achieve your retirement corpus well in advance.

Returns matter a lot in the long term

For investors with a long-term investment horizon, experts suggest investing in equity, as returns from it can help one beat inflation, but investors can choose a conservative strategy as per their risk appetite. However, to make the most of the investment, one should review their investments, as even a 1% higher annualised return can help one achieve the investment goal much earlier than the targeted time.

Presenting an example, Kuppa says if someone starts a Rs 10,000 step-up SIP with a 10% annual step, they can achieve a Rs 5 crore retirement corpus target four years earlier if they get a 14% annualised return instead of 10%.

Starting SIP	Annual investment increase (step up)	Annualised return	Years to reach Rs 5 crore corpus
Rs 10,000	10%	10%	29 years
Rs 10,000	10%	12%	27 years
Rs 10,000	10%	14%	25 years

Calculation: Vijay Kuppa, CEO, IncredMoney

Building a sizeable corpus from a modest salary is not an easy task. It needs patience, right selection of investments and methods, periodic increase in investment, and regular review of the investment portfolio. It’s an important financial goal for most of us. So, one needs to strategise it properly so that they don’t miss achieving the goal.

Calculator used: Groww