Are we out of touch with reality to advise 10% step-up SIP?

Summary: Step-up SIPs can double your wealth over 20 years, which means they are the real turbochargers of long-term investing. But is this strategy practical? In this story, we run the numbers, check the latest salary trends and ask: are we being too optimistic about your increment?

Let’s start with this: step-up SIPs are brilliant. They can turbocharge your wealth, like no one’s business. Instead of just investing the same Rs 10,000 every month for 20 years, you gradually increase that amount each year, say by 5 or 10 per cent. The difference? Huge.

Here’s an example:

• A plain Rs 10,000 monthly SIP for 20 years at 12 per cent annualised growth = Rs 99.9 lakh
• A 5 per cent step-up every year = Rs 1.37 crore
• A 10 per cent step-up every year = Rs 1.99 crore

So, a 10 per cent annual bump in SIP can earn you almost double the wealth.

But—and this is where the story changes—we started wondering: is it a little out of touch to recommend a 10 per cent step-up to everyone, every year?

When advice meets real life

On paper, step-ups look like magic. In real life, they assume we’re all getting fatter appraisals each year. They also assume our expenses don’t rise much, and that we’re always rational enough to prioritise SIPs over everything else.

Reality check: we’re not spreadsheets. We’re humans. With rising EMIs, school fees, rent, dependants, lifestyle inflation and unexpected medical bills. Sometimes, suggesting a 10 per cent SIP hike can feel like asking a tired runner to sprint uphill—while carrying groceries.

And here’s the clincher. A recent Appraisal Trends Report 2025 showed that most increments in India this year ranged between 5 and 10 per cent. In fact, in some sectors, people aren’t getting hikes at all.

• 41 per cent of advertising/media professionals got no hike
• 33 per cent in education? No hike.
• Even IT services saw 32 per cent with zero increments this year

And yet, you may find us continue to say, “Please step up your SIP by 10 per cent every year.”

We mean well. But maybe we’re asking too much.

Someone earning Rs 2 lakh a month might find it easier to step up their SIP by 10 per cent after an 8 per cent hike. But if you earn Rs 50,000, and your increment is the same 8 per cent? A 10 per cent SIP step-up might feel like an unachievable strategy.

That’s because the higher your base income, the more absolute rupees an increment gives you to play with. Which makes it easier to both save more and feel like you’ve gained something. For lower-income earners, increments often get swallowed by inflation, leaving little room for aggressive SIP strategies.

So, what’s the answer?

The principle still holds: step-up SIPs are powerful. But the percentage can be flexible.

• If your hikes are muted, a 5 per cent step-up is still meaningful.
• If you expect no hike at all this year? Stay flat. That’s okay.
• You can even pause the step-up in bad years and resume when things improve.

The idea is not to guilt yourself into poverty. It’s to gently push your investing habits to grow with you, without making your lifestyle miserable.

And most importantly: don’t let perfection be the enemy of progress. A flat SIP is still better than an erratic one. A 5 per cent step-up is better than zero. And zero shame is better than zero peace of mind.

Our final take?

You don’t need to be perfect. You just need to be consistent.

And if your pay hike isn’t cooperating with your SIP step-up goals this year… welcome to the club. We’re right there with you.

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This article was originally published on July 23, 2025.