Goal SIP Calculator

Secure Your Dreams with PaisaForever’s Goal SIP Calculator!

Are you an Indian who wants to achieve his/her financial goals?  Whether you want to pay for your child’s higher education, buy the dream house you always wanted, prepare for a financially independent retirement, or be ready for any future need when you have a significant corpus, all of – these require systematic and disciplined investing.  At PaisaForever we understand the unique financial goals of Indians, this is why we created our easy-to-use ‘Goal SIP Calculator’ – a great guide on the road to financial freedom.

You can forget about aimless saving. With our Goal SIP Calculator you will be able to set up precise financial goals. Instead of investing a random amount, with our Goal SIP Calculator you will be able to tell how much you exactly need to invest through a Systematic Investment Plan (SIP) on a monthly basis in order to reach your goal by the required time. This clarity brings in discipline when investing, brings in motivation in working towards the goal, and also gives you a plan on how to get to your target.

Not only does our calculator take the headache out of complex financial planning, but you are only required to enter your goal amount, how many years until your goal, and the expected rate of returns. Once you have entered those variables, The PaisaForever Goal SIP Calculator will provide you with the monthly SIP amount required immediately. You have the power of making informed decisions on your investment, change your investment rate where necessary, and monitor your investment journey.  It’s time to move from “I wish” to “I will” with your financial goals!

Frequently Asked Questions (FAQs) about Goal-Based SIP Investment

1. What exactly is Goal-Based SIP Investment? 

Goal-based SIP investment is a term used when building full financial plans, where you are able to connect your regular investment (SIP) to specific goals such as, buying a house, saving for education, retirement, etc.. You will not make random investments but calculate and then invest the exact amount into each goal in their measured time frame. 

2. How does the PaisaForever Goal SIP Calculator work? 

The calculator helps you calculate the SIP amount you need to save each month to meet a specific goal in a set amount of time. You enter:

• Your target amount or value of goal you want to save.
• How many years you have until you want to spend the money i.e. investment duration.
• The expected annual return on your investment, Then it will calculate and instantly tell you the amount of monthly SIP needed to invest.

3. Why should I bother with a Goal SIP Calculator? 

A Goal SIP calculator brings structure and discipline to your investment. It will help you:

• To create realistic financial goals.
• To identify the specific monthly amount that needs to be invested.
• To track the progress towards your goals.
• To help keep you on track and motivate you to not waver from the goal.
• To make better decisions about your investing.

4. Do SIP investments fit into all financial goals?

SIPs are generally an excellent tool for your long term and medium financial goals (generally 3 years and beyond) where you can benefit from rupee cost averaging and compounding of the units.  For very short term financial goals (1-2 years) you might want to consider debt funds, or liquid funds. 

5. What is “Rupee Cost Averaging” and how does this help me?

Rupee cost averaging means that you are making a regular investment of a fixed amount regardless if the market is up or down. When the market is down, you buy more units for the same fixed amount while when the market is up you buy less.  So, effectively when you make a regular fixed value investment, you are averaging your cost to buy units and mitigating any negative effects of market volatility, which in the long run will help you potentially yield better returns. 

6. Can I change my SIP amount or tenure if my financial situation changes?

Yes, most mutual fund houses in India will allow you to increase, reduce, suspend or stop your SIP. The PaisaForever Goal SIP will allow you to re-evaluate how much you can contribute as your income allows or as you achieve your goals.

7. What is the realistic expected rate of return to put into the calculator for the Indian markets? 

There is no guarantee of future returns based on past performance, but for a long-term equities SIP in India the conservative rate of return is around 10-12% per annum. In Hybrid funds it may be slightly lower, and for debt funds in line with current interest rates. It is always best to be realistic and slightly conservative.

8. Should I include inflation when determining my goals?

Yes! Inflation erodes the purchasing power of money over time. When you specify your future goal amount, for example the cost of your child’s education in 15 years, you need to include an average inflation rate (For example for education around 6-7%, for general expenses around 4-5%) to arrive at a more accurate present value of your goal.

9. Are SIP investments tax-efficient for India?

The returns from equity-oriented mutual funds (which is where most SIPs are invested for long-term goals), fall under Long-Term Capital Gains (LTCG) tax if held for over a year. But with an SIP in an Equity Linked Saving Scheme (ELSS), you will be able to enjoy a tax benefit under Section 80C of the Income Tax Act and allow deductions up to  Rs 1.5 lakh per financial year.

10. Can I continue to use the PaisaForever calculator to track how I am progressing toward my goals once I start my SIPs? 

The calculator is fundamentally a tool to develop the SIP amount that you require at the outset. However, you may continually input the current value of your investment, the remaining period and your revised goals and see how you are progressing and if you need to amend any part of your plan. Although we believe calculators can help provide a path in motion, we believe you are free to consistently review and amend your financial pathway as per your conditions. 

11. What can I do if the SIP amount is too large for my budget?

If you believe that the SIP amount you have calculated is too large, there are several things you can do: 

• Lengthen the investment period: If you make your investment period longer, you will reduce your monthly SIP amount. 
• Reduce the goal amount: You can investigate whether you could achieve your goal with a smaller corpus. 
• Increase your income or reduce expenditure: This is the easiest way to find more money to invest. 
• Start small and step-up: Get started with a small SIP amount, and as you earn more, increase your SIP amount (step-up SIP). 

12. Should I consult with a financial adviser even if I use the Goal SIP calculator? 

While the calculator is a powerful tool, it provides an estimate. A financial adviser will provide you with personalized advice, risk profiling, fund recommendations, and a financial plan that captures all information about your financial life, including insurance and debt. It’s an excellent idea to consult with a SEBI Registered financial adviser to refine your strategies and evaluate market complexities.

Disclaimer: This calculator provides only estimated returns based on the inputs you provide. It is intended for informational purposes and should not be considered financial advice. Mutual funds do not guarantee fixed returns, and actual outcomes may vary. Past performance is not indicative of future results. Consult a qualified financial advisor before making any investment decisions.