Power of Compounding: How to build Rs 1.5 crore retirement corpus with SIPs of Rs 2,500, Rs 4,500 and Rs 8,000
Mutual Funds SIP To Become A Crorepati: Considering rising inflation and the declining value of the rupee, becoming just a millionaire 25 years from now will not be enough. To enjoy a happy and easy life, it will be necessary for you to have a good amount of money. With this in mind, it is important to start retirement planning early to secure your financial future. By the time you retire, setting aside at least Rs 1.5 crore will not only meet your needs but also provide a stress-free life.
Mutual Funds SIP is a better option
In today's era, one of the most effective ways to build a significant corpus is through Mutual Fund SIP (Systematic Investment Plan). Despite being linked to market performance, SIPs offer better long-term returns than most other investment options.
Retirement Planning: How to plan your retirement?
If you start planning for retirement early in your career, say at age 25, you have ample time to save. However, if you are already 35, you only have 25 years left to save until you turn 60. So, how much you should invest in SIP to become a millionaire depends on whether you are 25, 30, 35 or 40 years old.
Retirement Planning: If you’re 40 years old
With 20 years till retirement, you should start an SIP of at least Rs 15,000 per month. In 20 years, you will invest Rs 36,00,000, and at an average return of 12 per cent, you will earn Rs 1,13,87,219 in interest. By the age of 60, your total wealth will be Rs 1,49,87,219.
Retirement Planning: If you’re 35 years old
With 25 years till retirement, you should start an SIP of at least Rs 8,000 per month. In 25 years, you will invest Rs 24,00,000, and at an average return of 12 per cent, you will earn Rs 1,27,81,081 in interest. By the age of 60, your total wealth will be Rs 1,51,81,081.
Retirement Planning: If you’re 30 years old
If you have 30 years until retirement, you can start an SIP of Rs 4,500 per month. Over 30 years, your total investment will be Rs 16,20,000. At a 12 per cent return, you’ll earn Rs 1,42,64,612 in interest, giving you a total of Rs 1,58,84,612 by age 60.
Retirement Planning: If you’re 25 years old
With 35 years to save, an SIP of just Rs 2,500 per month can make you a millionaire. You will invest Rs 10,50,000 over 35 years, and with 12 per cent returns, you’ll earn Rs 1,51,88,173 in interest. By the time you turn 60, you’ll have Rs 1,62,38,173, far exceeding 1.5 crore.
Investing in Mutual Funds through SIP is less risky
Investing in mutual funds through SIP is less risky than buying stocks directly. With average returns of around 12 per cent, SIPs outperform most government schemes.
Power Of Compounding
The power of compounding makes your money grow rapidly over time, making long-term SIPs an excellent strategy for wealth creation.