From Rs 15,000 Monthly SIP to Rs 10 crore Retirement Corpus: In how many years, you can achieve this goal? Understand it through calculations
From Rs 15,000 Monthly SIP to Rs 10 crore Retirement Corpus: Investing for a longer period can help one generate a sizeable corpus. The best way to achieve it is to begin the investment journey early and stay consistent on the investment path.
A steady run that turns into a record-breaking leap starts with a small step, just like a giant tree grows from a tiny seed. In the same way, a large retirement fund can start with small, regular investments. Even if the amount seems little at first, the importance of starting early and the power of compounding can work wonders. For example, investing Rs 15,000 monthly in a Systematic Investment Plan (SIP) can help generate a sizeable corpus of Rs 10 crore. Let’s find out how can you make it happen.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is retirement planning?
It is important to plan for retirement at an early age as it is an important stage in life. It is a process of getting ready for a comfortable life once you’ve retired from work, whether it’s a job or a business.
Why is retirement planning important?
Planning a retirement is important to maintain a standard of living after retiring from a full-time job, whether it be corporate or business. One needs to plan for it to avoid depending on others for financial support.
When should you start retirement planning?
Starting early can help your investment grow gradually with the help of the power of compounding. It makes it easier to reach your retirement goals.
Retirement planning through mutual fund SIP
Investors can plan a retirement by investing through a systematic investment plan (SIP) in a mutual fund(s) scheme, which will help them build a sizeable corpus post retirement.
What are the steps to plan your retirement?
One should first set retirement goals.
Analyse financial situation
They should choose a suitable retirement plan
Retirement Planning: Calculation conditions
Target corpus: Rs 10 crore
Monthly investment: Rs 15,000
Annualised returns: 12 per cent
How soon one can generate Rs 10 crore retirement corpus with Rs 15,000 monthly investment?
It will approximately take 36 years to achieve the target of Rs 10 crore retirement corpus.
What will be the estimated retirement corpus in 36 years?
With Rs 15,000 monthly SIP, the estimated retirement corpus will be Rs 10,99,77,616. During that time, the investment amount will be Rs 64,80,000, and the estimated capital returns will be Rs 10,34,97,616.
What will be your retirement corpus with step up SIP: Calculation conditions
Target corpus: Rs 10 crore
Starting monthly investment: Rs 15,000
Investment period: 36 years
Annualised return: 12 per cent
Annual step up: 5 per cent
What if you opt for a 5 per cent annual step up by starting with Rs 15,000 investment?
The estimated retirement corpus will be Rs 16,95,69,935. During that time, the investment amount will be Rs 1,72,50,538, and the estimated capital gains will be Rs 15,23,19,396.