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Goal SIP Calculator — Working Backwards From the Target

Most calculators ask what you can invest. This one asks what you need, and tells you what that would take under your own assumption.

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years
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Education and medical costs usually rise faster than general prices.
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This is your assumption, not a promise.
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Only money genuinely reserved for this. Not your emergency buffer.
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Raising the instalment with income lowers the starting amount.
Please read this. The instalment shown is what the arithmetic requires if the rate you typed in actually happens. Mutual fund returns are market-linked, arrive unevenly, and are not promised by anybody. Exit load and tax are not included. Myfolios is an AMFI-registered mutual fund distributor (ARN-145870) and not an investment adviser.

Why the third box matters most

The headline figure is the instalment your assumption requires. The box next to it shows what the same goal needs if returns come in three percentage points lower, and that gap is the honest measure of how much the plan depends on being right.

If the two numbers are close, the goal is comfortably fundable and a poor stretch will not derail it. If the lower-rate figure is far beyond what you can commit, the plan is not really funded by your saving; it is funded by an assumption. Better to know that in year one, when the options are still a longer horizon, a smaller target or a higher instalment.

Put inflation on the goal, not on the return

A common mistake is to reduce the return assumption to "account for inflation" and leave the target in today's money. That mixes two adjustments and usually understates the requirement.

Do it the other way. Keep the return assumption as a nominal figure, and inflate the goal to what it will actually cost in the year you need it. Education and medical costs in particular tend to rise faster than general prices, so a fee quoted today is rarely what will be charged in eight years.

When the number comes out too high

This happens often and it is not a failure of the exercise. It is the exercise working.

  • Start lower and step up. Set a step-up above and watch the starting instalment fall. Tying increases to your salary increment is the version that survives, as our page on step-up SIPs explains.
  • Lengthen the horizon if the date is genuinely movable. Many goals are less fixed than they first appear.
  • Reduce the target to the part you will fund yourself, and be explicit about how the rest is covered.
  • Check the horizon suits equity at all. Within two or three years it does not, whatever the arithmetic says, as our page on mutual funds versus fixed deposits sets out.

One goal per calculation

Run this separately for each goal rather than adding them together. An education bill in six years and a retirement in twenty are different problems, and combining them means the nearer one eventually dictates what the further one is allowed to do. Our page on running more than one SIP explains why separating them costs nothing and makes every later decision obvious.

And plan the exit at the same time as the entry. A corpus built for a date should be shifted towards low-risk categories in stages as that date approaches, on a schedule you decide now rather than a judgement made under pressure later. If you want this worked out against your own situation, get in touch.

Goal SIP Calculator — Frequently Asked Questions

It works backwards. You enter the amount you need and the year you need it, along with your own return assumption, and it solves for the monthly instalment that would reach that figure. The output is a requirement under your assumption, not a prediction of what any investment will do.

Yes, for anything more than a few years away. A fee or a cost quoted in today's money will be higher by the time you need it, and planning against today's figure builds a shortfall into the plan from the first month. The calculator lets you apply a rate you choose to the target.

That is useful information rather than a failure. The options are a longer horizon, a smaller target, starting with less and stepping it up as income grows, or accepting that part of the goal will be funded another way. Knowing this now is far better than discovering it two years before the date.

No. The calculation assumes a steady rate that you supplied, while actual returns are market-linked and arrive unevenly. Run it again at a lower rate to see how much the requirement changes, and treat the higher of the two figures as the more honest number to plan around.

The arithmetic works for any period, but a short horizon changes what you should invest in rather than how much. Money needed within two or three years belongs in a deposit or a low-risk category, where the required amount is higher precisely because you are not relying on growth.

Yes. Enter the existing amount earmarked for this goal and the calculator grows it alongside the instalments, which reduces the monthly requirement. Only include money genuinely reserved for this goal, not your emergency buffer.

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