If you’ve ever dreamed of retiring early without worrying about money, this could be the plan that changes everything. Let’s walk through a strategy known as the “Triple 5” formula — a simple way to build wealth with discipline, consistency, and the power of compounding.
In today’s world of rising expenses and uncertain pensions, planning your retirement isn’t optional — it’s urgent. That’s where the 5-5-5 rule comes in:
Retire 5 years early, increase your SIP by 5% each year, and aim for a ₹5 crore corpus.
What Is the 5-5-5 SIP Formula?
The 5-5-5 rule is a long-term investment plan using Systematic Investment Plans (SIPs) in mutual funds. It’s built around three simple ideas:
- Retire 5 years earlier than the usual retirement age
- Increase SIP contributions by 5% annually
- Build a corpus of ₹5 crore or more before retirement
This strategy is ideal for people in their 20s or early 30s who want to create wealth over the next 25–30 years — without needing a high income today.
Why Starting Early Makes a Huge Difference
If you’re wondering why early planning is so powerful, here’s the truth:
Let’s say you start investing at age 25 instead of 35. That 10-year head start can more than double your final corpus — even if the monthly amount stays the same.
That’s because compounding doesn’t just grow your money — it grows the growth itself.
Breaking Down the Triple 5 SIP Formula
1. 5 Years Early Retirement
Most people retire at 60. This formula encourages you to aim for retirement at 55. That means you’ll need your retirement corpus ready five years earlier — but you’ll also enjoy five extra years of freedom.
2. Increase SIP by 5% Annually
Let’s say you start with a ₹1,000 SIP every month.
Each year, you raise that amount by just 5%. That means:
- Year 1: ₹1,000
- Year 2: ₹1,050
- Year 3: ₹1,102… and so on.
This gradual increase makes it easier to invest more without feeling the pinch.
3. Reach ₹5 Crore Corpus
Using this model — with an assumed return of 11% annually over 30 years — your total investment can grow to more than ₹5 crore.
This number isn’t magic. It’s the result of consistent investing + annual SIP hikes + compounding returns.
Real-Life Example: From ₹1,000 to ₹5.20 Crore
Here’s a practical illustration:
| Year | Monthly SIP (after 5% increase) | Estimated Return (11%) |
|---|---|---|
| Year 1 | ₹1,000 | ₹13,200 |
| Year 10 | ₹1,550+ | ₹3–5 lakh (cumulative) |
| Year 30 | ₹4,320+ | ₹5.2 crore corpus |
The total invested amount will be less than ₹20 lakh — and your return will be over ₹5 crore.
That’s the power of early investing and smart growth.
Post-Retirement Monthly Income: ₹2.60 Lakh Guaranteed?
Once you retire with a ₹5.20 crore corpus, here’s how you can convert it into steady monthly income:
- Put the amount into a safe fixed deposit or other low-risk options offering ~6% returns
- That would give you ₹31.20 lakh/year, or ₹2.60 lakh/month
This kind of passive income provides financial freedom without stress — exactly what retirement should feel like.
Key Takeaways from the 5-5-5 Plan
- You don’t need a huge salary to become rich — just discipline and consistency
- SIPs are flexible — start small and grow gradually
- Even a 5% annual increase in investment has a massive long-term impact
- Compounding rewards patience — the longer you invest, the more you gain
- You can retire at 55 and still enjoy a strong, inflation-proof income