Freedom Replacement SIP Calculator
Use this free Freedom Replacement SIP calculator to find the age at which your investments can replace your monthly expenses for good. Enter your expenses, your SIP and the returns you assume. The calculator shows the corpus you need, the age at which you reach it, and the SIP needed to be free by an age you choose.
How this Freedom Replacement SIP calculator works
Being free here means your investments can pay your expenses, rising with inflation, for ever, while the corpus itself keeps its value in today’s money. The calculator first works out that corpus: the amount whose return, after paying out the year’s expenses, still grows as fast as prices rise. This needs the return after you become free to be higher than inflation. It then adds your SIP month by month, with any yearly increase, and finds the first month in which your investments reach the corpus needed on that date. For example, with ₹40,000 of monthly expenses today, 6% inflation, a ₹25,000 monthly SIP, and returns of 12% before freedom and 9% after, the investments reach the corpus needed at age 59. By then the expenses are ₹2.24 lakh a month, and the corpus needed is about ₹8.36 crore, which is ₹1.49 crore in today’s money. The result is an illustration, not a forecast.
What the table shows
The table lists the first 30 years after the freedom date. The monthly payout rises every year with inflation, and the corpus grows at the same pace, so its value in today’s money stays at ₹1.49 crore in this example. That is what lets the payouts continue for ever under these assumptions.
Why the corpus is large
A corpus meant to last for ever is much larger than one meant to last only until a certain age, because it must keep its value, not be used up. In this example, ₹1.49 crore in today’s money is about 31 times a year’s expenses. The gap between your return after freedom and inflation matters a great deal. A return of 10% instead of 9% lowers the corpus needed, in today’s money, to about ₹1.13 crore and moves the freedom age from 59 to 55. At 8%, it rises to about ₹2.18 crore and the age moves to 65. Try different returns, and be cautious about assuming a high one.
What this calculator does not include
It assumes steady returns, while real returns are uneven, so a plan that works on average can still be strained by a bad run of years early on. See how it holds up with our Retirement Monte Carlo calculator. Taxes, costs and changes in your expenses, such as rising health costs, are not included, and the calculator does not count other income such as a pension. Please treat the result as a starting point for a conversation, not a prediction.
Frequently asked questions
What does it mean to replace my salary?
It means your investments pay for your lifestyle every month, with the payout rising each year with prices, so that working becomes a choice rather than a need.
Why must the return after freedom be higher than inflation?
If the corpus earns less than prices rise, paying out inflation-linked expenses eats into it, and it cannot last for ever. The calculator shows an error in that case.
What if I do not need the money to last for ever?
Then a smaller corpus is enough. Our Retirement calculator estimates the corpus needed to last up to an age you choose, and our SWP calculator shows how long a sum lasts at a chosen withdrawal.
Is the return shown guaranteed?
No. Mutual fund returns are market-linked and can be higher or lower than the rates you enter. Mutual fund investments are subject to market risks. Read all scheme related documents carefully. Learn more on the AMFI investor awareness site.
Is my information saved?
The calculations run in your browser. The figures you enter are not sent to us or stored unless you choose to send them, for example by using the WhatsApp button.