Monthly SIP to hit a goal.
Monthly SIP required
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Future cost of goal
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Existing savings grow to
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Your breakdown
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Working backwards from the goal, not forwards from the SIP
Most SIP calculators ask how much you will invest and tell you what you might end up with. A goal calculator runs the other way. You name the target, a child’s college fund, a house down payment, a car, and it tells you the monthly SIP needed to get there. This reverse framing is far more useful for real planning, because life sets the goal first. You know your daughter starts engineering in ten years; what you do not know is the SIP that funds it.
Two adjustments make the answer honest. First, the goal is inflated to its future cost, because a degree that costs Rs 20 lakh today will cost considerably more by the time the fees are actually due. Second, any money you have already earmarked for this goal is grown at your expected return and subtracted, so you only fund the genuine shortfall.
The three calculations under the hood
The tool runs three steps. It inflates the goal to its future value using your goal-inflation rate. It compounds your existing earmarked savings to the same future date at your expected return. The difference between those two is the gap the SIP must fill, and that gap is converted into a monthly contribution using the future-value-of-an-annuity formula, solved for the payment. Crucially this uses an ordinary annuity: the required SIP is the gap times the monthly rate, divided by ((1 plus the monthly rate) to the power of the number of months, minus one). There is no extra start-of-period multiplier here, which is what separates a goal SIP from a plain growth projection.
A worked example: a Rs 20 lakh goal in ten years
Imagine a goal that costs Rs 20 lakh in today’s money, ten years away. You expect goal inflation of 6 percent, you plan to invest in equity funds returning 11 percent, and you already hold Rs 3 lakh earmarked for it. Here is the chain.
The headline is that the real target is not Rs 20 lakh, it is nearly Rs 36 lakh. Sizing your SIP against today’s price would have left you short by about Rs 16 lakh, a gap no amount of last-minute saving fixes. The existing Rs 3 lakh quietly does a lot of work too, growing to over Rs 8.5 lakh and shaving the monthly requirement.
Picking a sensible return and inflation rate
The output is only as good as your two assumptions. For goals more than seven years out, an equity-heavy portfolio returning 11 to 12 percent is a reasonable long-run estimate, though never guaranteed. For goals inside three years, drop to debt funds and assume 6 to 7 percent, because you cannot afford an equity drawdown just before you need the money. On inflation, do not use the headline CPI of 4 to 5 percent for everything. Education and healthcare inflate faster, often 8 to 10 percent, so a college goal deserves a higher inflation input than a car.
A tip that makes the number achievable
If the required SIP looks unaffordable today, do not abandon the goal, step it up. A SIP that rises 10 percent a year alongside your salary starts much lower than a flat SIP and still reaches the same corpus. Many investors find a Rs 9,000 starting SIP that grows annually far easier to begin than a flat Rs 12,580. The discipline of starting matters more than starting at the perfect number.
Should I use one SIP for several goals?
It is cleaner to keep one SIP, or one folio, per goal. Mixing your retirement, your house, and your child’s education in a single pool makes it impossible to know whether any one goal is on track, and you risk raiding the long-term money for a nearer want. Tag each SIP to its goal and review them separately.
What if my returns come in lower than assumed?
Then you will fall short, which is why an annual review matters. Recheck the gap every year against the actual value of your investments. If markets have underperformed, you nudge the SIP up; if they have run ahead, you can ease off. The plan is a living thing, not a one-time calculation.