A ₹25,000 monthly SIP looks like the same commitment every month for fifteen years.
The number on your bank statement never moves. Its purchasing power does. By the start of year fifteen, that ₹25,000 instalment is worth about ₹11,058 in today's money, at 6% inflation.
A flat SIP is a shrinking one. Here is what that costs, and what fixing it is worth — including the part most articles leave out.
The flat SIP, in today's money
Each figure is the instalment paid at the start of that year, expressed in today's purchasing power.
| Year | Instalment | In today's money |
|---|---|---|
| 1 | ₹25,000 | ₹25,000 |
| 5 | ₹25,000 | ₹19,802 |
| 10 | ₹25,000 | ₹14,797 |
| 15 | ₹25,000 | ₹11,058 |
If your income rises over time, a flat SIP also becomes a smaller share of it every year. The effort you are putting in falls on both measures at once.
A 6% step-up is not a step-up
Most step-up SIPs are set at 5% or 6% a year, which sounds disciplined.
At 6% inflation, a 6% annual step-up roughly preserves the purchasing power of each instalment. The final one, at the start of year fifteen, is worth about ₹25,000 in today's money — what you started with. You are not raising your real savings. You are roughly holding them steady.
That is still far better than flat. It just isn't what most people think they are doing.
Three rates, not one
It helps to separate three things that are easy to blur.
Inflation sets how fast your money loses purchasing power.
Salary growth sets how fast your earning capacity may rise.
Your step-up sets how fast your contribution rises.
A step-up that matches inflation keeps your savings steady in real terms. A step-up that matches your salary growth keeps your savings a constant share of your income. If your income grows faster than inflation, you have room to do the second without feeling it.
What the step-up should actually be
The useful anchor isn't India's average salary hike. It's yours.
For context, Aon's annual survey, published 24 February 2026, projects Indian salaries will rise 9.1% on average in 2026, up from 8.9% in 2025, across more than 1,400 organisations in 45 industries. Sector figures vary around that, and so do individual raises — yours might be 3%, 12% or nothing, and a job change can reset it entirely.
So 9.1% is used in this article as a scenario, not a prediction of your raise.
The simpler rule of thumb: when your income rises, raise your SIP by roughly the same percentage, if your budget allows. A 5% raise suggests a 5% step-up. An 8% raise, 8%. No raise means no step-up is required. A promotion or job change is a moment to reassess the whole amount, not just apply last year's percentage.
What each choice is worth — and what it costs
Same basis as our first article: starting at ₹25,000, fifteen years, 10.5% net return after a 1.5% expense ratio, capital gains tax on redemption.
| Plan | You invest | Post-tax | In today's money |
|---|---|---|---|
| Flat | ₹45.00 L | ₹1.01 Cr | ₹42.24 L |
| 50% jump after yr 5 | ₹60.00 L | ₹1.26 Cr | ₹52.71 L |
| 6% step-up | ₹69.83 L | ₹1.41 Cr | ₹59.00 L |
| 9.1% step-up | ₹88.78 L | ₹1.71 Cr | ₹71.22 L |
| 10% step-up | ₹95.32 L | ₹1.81 Cr | ₹75.36 L |
The 9.1% scenario takes the real, post-tax outcome from ₹42,24,391 to ₹71,22,083 — about 69% more real wealth. But it also requires ₹88,77,796 of contributions against ₹45,00,000: 97% more money put in.
Both numbers matter. Quoting only the first would be telling you half the story.
A step-up isn't a higher-return strategy
This is the most important thing in the article.
Your fund does not earn more because you raised the SIP. The return is the same 10.5% in every row above. You are simply putting more money to work while your earning capacity grows.
In fact, each rupee works slightly less hard as the step-up rises:
| Plan | Money multiple |
|---|---|
| Flat | 2.25× |
| 50% jump after yr 5 | 2.11× |
| 6% step-up | 2.03× |
| 9.1% step-up | 1.92× |
| 10% step-up | 1.89× |
Rupees added in year fourteen have one year to compound; rupees added in year one had fifteen. A step-up tilts your contributions later, so the average rupee compounds for less time.
That doesn't make stepping up a bad idea. It means the question isn't "should I step up by 10%?" It is "how much of my income do I want to keep investing as that income changes?"
Back to the hard number
The first article ended with a figure that was difficult to look at. To reach ₹1 crore of real, post-tax wealth in today's money after fifteen years with a flat SIP, you would need to start at ₹59,235 a month.
With a step-up, the starting point drops considerably.
| Plan | Starting SIP for ₹1 crore real |
|---|---|
| Flat | ₹59,235 |
| 6% step-up | ₹42,390 |
| 9.1% step-up | ₹35,112 |
| 10% step-up | ₹33,182 |
Stepping up alongside your income means starting at ₹35,112 instead of ₹59,235 — a very different conversation with your budget in year one, because the later, larger instalments arrive when your income is larger too.
The one-time jump
A reader asked about a different approach: ₹25,000 for five years, then raise it 50% to ₹37,500 and hold it there.
That puts in ₹60,00,000 and produces ₹1,26,31,671 post-tax, or ₹52,70,755 in today's money — about ₹10 lakh better than flat in real terms.
A worthwhile improvement, but a smaller one than a steady annual step-up. After the jump, the instalment is flat again, and starts shrinking all over. A single raise helps once; an annual step-up keeps helping.
Where a step-up SIP breaks down
A raise isn't the same as more spare money. Your salary can rise while your investable surplus doesn't — absorbed by rent, school fees, insurance, EMIs or a changing lifestyle. A step-up should follow what you can sustainably set aside, not the percentage on your appraisal letter.
Salary growth isn't guaranteed. You may have a flat year, change jobs, take a career break, or face expenses that rise faster than pay.
A step-up is a rule, not a contract. If income falls or costs jump, reduce or pause the increase. Pausing a step-up for a year is far better than stopping the SIP. The goal is a savings habit you can keep, not a spreadsheet assumption kept alive at any cost.
The early years carry the most weight. Because early rupees compound longest, the first few step-ups matter more than the later ones. Setting it up in year one beats remembering in year five.
The SIP Calculator has a step-up input. Set it to your own last raise and see what changes.
Sources and assumptions
Primary data
- Salary growth: Aon, Annual Salary Increase and Turnover Survey 2025-26 India, press release 24 February 2026 — projected average increase of 9.1% for 2026 against 8.9% in 2025, covering more than 1,400 organisations across 45 industries. An average across organisations, not a forecast for any individual.
Model
- Starting SIP ₹25,000 a month, 180 instalments at the start of each month.
- Step-ups applied once a year: the instalment in year n equals the starting amount × (1 + step-up)^(n−1).
- 10.5% annual net return (12% gross less a 1.5% expense ratio), compounded monthly — the same basis as the first article in this series. Identical in every scenario. Not a forecast.
- 6% inflation. Instalments are deflated by the years elapsed before they are paid, so the year-15 instalment reflects fourteen years of inflation. The final corpus, which exists at the end of year fifteen, reflects fifteen.
- The one-time jump: ₹25,000 for years one to five, ₹37,500 for years six to fifteen.
- For modelling simplicity, the entire portfolio is assumed to be redeemed at the end of year fifteen, with Section 112A LTCG at 12.5% on the gain above the ₹1.25 lakh annual threshold used in that redemption year, plus 4% cess. No surcharge; no other Section 112A gains or losses.
- The whole corpus is treated as long-term. Actual SIP taxation can differ, because each instalment has its own holding period and the final twelve months' instalments would be short-term if redeemed immediately.
- No change in tax law. Exit load, STT and stamp duty not modelled.
This article explains arithmetic. It is not investment advice. Salary growth varies widely by person, industry and year.