Before Raising Your SIP After a Salary Hike, Check These Priorities

Market rallies can silently push equity exposure above the level an investor is comfortable with. Agarwal noted that a salary hike provides a chance to rebalance into debt, hybrid, or international assets instead of routing all fresh savings into equity SIPs. Inflation is another factor. At 6% inflation, purchasing power halves in roughly 12 years, he said, so salary increases need to translate into higher long-term investment to preserve future spending power.

A simple rule many planners follow is to step up SIPs by 10-15% every year. Agarwal illustrated the difference with a typical example. A ₹20,000 monthly SIP earning 12% annualised returns over 25 years would grow to about ₹3.8 crore. With a 10% annual step-up, the same starting amount would build roughly ₹8-9 crore over the same period, he said. The gap shows the power of compounding and makes the case for systematic increases instead of impulsive jumps after a raise.