Power of Compounding: How much money do you need to invest in monthly SIP to accumulate Rs 5 crore retirement corpus if started investing at 30? See calculations with examples
SIP, or systematic investment plan, is a disciplined approach to mutual fund investing that involves investing a certain amount of money every month. SIPs are a wonderful alternative for investors who wish to save for retirement, build wealth, or support schooling.
According to experts, if you want to see the power of compounding interest start investing as early as possible. But don't worry if you have started late, you can still accumulate a large corpus through a monthly SIP.
Monthly SIP to accumulate a Rs 5 crore corpus
In this article, we will discuss how much you need to invest in a monthly SIP to accumulate a Rs 5 crore corpus even if you started investing at the age of 30.
What is SIP?
SIP, or systematic investment plan, is a disciplined approach to mutual fund investing that involves investing a certain amount of money every month. SIPs are a wonderful alternative for investors who wish to save for retirement, build wealth, or support schooling.
Benefits: Flexibility
If you are going through some financial issues, you can adjust the amount too as per your budget.
Compounding interest
SIPs can let your money grow tremendously over time due to compounding interest.
Rupee cost averaging
SIPs allow you to purchase more units when the net asset value (NAV) is low and fewer units when the NAV is high.
Makes you a disciplined investor
Since your money gets automatically deducted, it makes you to invest regularly.
How does SIP work?
When you apply for one or more SIP plans, the payment is automatically deducted from your bank account and invested in the mutual funds you choose at the set time interval. At the end of the day, you will be awarded units of mutual funds based on their NAV.
Types of SIP
- Top-up SIP
- Flexible SIP
- Perpetual SIP
What is NAV in SIP?
NAV is the price at which the investors buy or sell mutual fund units.
Invest this much in SIP to accumulate Rs 5 crore retirement corpus
Monthly SIP: Rs 14,250
Annual return: 12%
Duration: 30 years
Total investment in 30 years: Rs 51,30,000
Maturity amount: 5,03,01,271
Disclaimer: Investing in mutual funds is subject to market risks. Consult your advisor before making any investment.