A hypothetical monthly investment begun at age 25 is projected to have a larger balance at 60 than one started at 35, despite lower contributions, under a fixed return assumption.
NDTV Profit reported Nov. 2 that its comparison assumes 12% annual returns in both cases. The age-25 investor contributes ₹5,000 per month for 35 years, or ₹21 lakh in total, and the model puts the balance at ₹3,24,76,345. Starting at 35, the modeled ₹15,000 monthly contributions run for 25 years and total ₹45 lakh, with a projected balance of ₹2,84,64,526. The difference is ₹40,11,819, roughly ₹40.12 lakh, in favor of the earlier schedule.
UTI Mutual Fund’s retirement presentation lists the same ending amount for the ₹5,000 schedule. It says its estimate assumes a 12% return and contributions at the beginning of each period. That timing affects the calculation because money invested earlier has more time to grow. NDTV Profit’s article does not specify how it converts the annual assumption into a monthly rate.
The published totals can be reproduced using a 1% monthly rate, equivalent in this calculation to dividing 12% by 12, with contributions at the start of each month. HDFC Mutual Fund’s SIP calculator uses a compounded conversion from annual to monthly return, producing a rate of about 0.95% a month for a 12% annual assumption. Recalculating both schedules with that conversion and the same payment timing gives approximately ₹2.76 crore for the earlier start and ₹2.55 crore for the later one.
A systematic investment plan (SIP) puts a fixed amount into a mutual fund at regular intervals. The Association of Mutual Funds in India (AMFI) says each installment can buy a different number of units as a fund’s net asset value (NAV) changes. The association cautions that rupee-cost averaging cannot guarantee a profit or shield investors from losses in a declining market.
The comparison does not name a fund or specify charges, taxes, inflation adjustments or returns that vary year by year. The Securities and Exchange Board of India (SEBI) says its SIP calculator provides illustrations rather than actual returns.
