The Problem with Fixed-Amount SIPs
While standard Systematic Investment Plans (SIPs) enforce rupee-cost averaging and disciplined savings, maintaining a constant monthly contribution over 10 or 20 years ignores real-world wage inflation and career progression. A Step-Up SIP synchronizes your investments with income growth.
1. The Math of Step-Up Compounding
Consider two investors starting at age 30 with ₹20,000 monthly contributions at a nominal 12% CAGR over 20 years:
- Flat Regular SIP: Invests ₹48 Lakhs total; ends with approximately ₹1.99 Crore.
- 10% Annual Step-Up SIP: Invests ₹1.37 Crore total; ends with approximately ₹4.15 Crore.
By increasing the monthly installment by just 10% each year, Investor 2 accumulates more than double the wealth, vastly outpacing inflation.
2. Aligning Step-Up Frequencies on MyPlexus
The MyPlexus SIP Analytics Suite allows you to model custom step-up increments, testing sensitivity against financial milestones.
