Financial Calculations & Valuation Beginner

Annual Step-Up SIP & Inflation-Adjusted Retirement Corpus Simulator in Python

Model month-by-month Mutual Fund Step-Up SIP compounding (e.g., 10% annual top-up) and compute real inflation-adjusted purchasing power in Python Pandas.

#pandas#numpy

Problem Statement

Standard Excel FV formulas only handle flat monthly contributions. In reality, investors increase their SIP by 10%–15% every year as income grows, dramatically accelerating compounding.

Formula / Core Logic

Year_y_SIP = Initial_SIP * (1 + Step_Up_Pct)^(y-1) Real_Corpus = Nominal_Corpus / (1 + Inflation_Rate)^Years

Installation

pip install pandas numpy

sip-step-up-wealth-corpus-inflation-calculator-python.py

import pandas as pd

def simulate_step_up_sip(initial_sip, step_up_pct, annual_return_pct, years, inflation_pct=6.0):
    r_month = (annual_return_pct / 100.0) / 12.0
    corpus = 0.0
    total_invested = 0.0
    current_sip = initial_sip
    
    rows = []
    for yr in range(1, years + 1):
        for _ in range(12):
            corpus = (corpus + current_sip) * (1 + r_month)
            total_invested += current_sip
        real_val = corpus / ((1 + inflation_pct / 100.0) ** yr)
        rows.append({'Year': yr, 'Monthly_SIP': round(current_sip, 0), 'Total_Invested': round(total_invested, 0), 'Nominal_Corpus': round(corpus, 0), 'Inflation_Adjusted_Corpus': round(real_val, 0)})
        current_sip *= (1 + step_up_pct / 100.0)
    return pd.DataFrame(rows)

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Frequently Asked Questions

Q: How much difference does a 10% annual Step-Up make over 20 years?

A 10% annual step-up typically more than doubles the final maturity corpus compared to a static SIP.