Retirement Planning: How you can take your corpus from Rs 2 crore to Rs 3.08 crore if you do this with your investment

Maximise your returns, cost of delay, power of compounding: Should I start investing today, a few months later, or a few years later? It is one of the biggest dilemmas for a salaried class person.

In lack of proper financial guidance or planning, they often find themselves confused whether to start investing now or later.

The second roadblock is that they often feel that even if they manage to save a little amount every month from their monthly income and start investing it somewhere, it won't create a corpus that can help them meet their financial goals.

But in the world of investing, each day counts.

The longer the duration of one's investment, the higher compounding returns they get.

Wasting time in taking a decision to invest can be a huge opportunity lost.

If you wait for your salary to reach a certain stage and then start investing, somebody who started their investing journey 10 years earlier than you may build a larger corpus despite having a smaller investment.

In this write-up, through expert calculations, we will show how a person can gather Rs 1.08 crore more in their retirement corpus on a Rs 10,000 monthly investment if they invest for 5 years more. 

Sameep Singh, Product Head of Investments, Policybazaar, "Starting your investment journey early is the most powerful step you can take to maximise your returns. Compounding allows your earnings to generate their own earnings, creating exponential growth over time. By investing consistently and giving your corpus a long horizon, you’re not just building wealth but creating a cycle where growth feeds further growth."  

How to gather Rs 1.08 crore more in corpus

Let’s illustrate this with numbers

Starting at age 30 with a monthly investment of Rs 10,000 until age 60, and assuming a 12 per cent annual return, you’ll end up with Rs 3.08 crore on a total investment of Rs 36 lakh.

In contrast, delaying by even 5 years and starting at age 35 means that, despite increasing your monthly investment to Rs 12,000 to match the same total of Rs 36 lakh, your corpus at 60 would only grow to Rs 2 crore.

This delay costs you nearly Rs 1 crore—a significant amount that underscores the impact of even a small deferral.

Cost of delay calculation

At age 30 years, you invest till retirement age: 60 years

Invest Rs 10,000 per month or Rs 1.2 lakh per year

Rate of return: 12 per cent

Invested amount: Rs 36 lakh

Corpus at 60 years: Rs 3.08 crore

If you delay by 5 years and start investing at 35 years for 25 years

Invests Rs 12,000 per month and total invested amount remains same

Invested amount: Rs 36 lakh

Corpus at 60 years of age: Rs 2 crore

Difference in final amount at Rs 1 crore, you lose up almost Rs 1 crore because of delay in starting your investment

Calculation Courtesy: Policybazaar.com 

"The cost of delay is essentially the loss of compounded growth. Every year you wait, you lose a year of returns on your principal, but more critically, you lose the returns that those returns could generate over time," said Singh.