Can 20,000/month SIP not only create huge corpus but also fund Rs 72,000 pension? Calculations that may surprise you
Want to retire early? Know how disciplined SIP (Systematic Investment Plan) and SWP (Systematic Withdrawal Plan) investment strategies can help individuals achieve their retirement goals in just 12 years. By starting with a monthly investment of Rs 20,000, individuals can build a substantial corpus of Rs 18.6 lakh, allowing them to withdraw Rs 72,000 monthly for 30 years.
Early Retirement Planning: For a financially stable life after retirement, it is essential to make proper retirement planning. While many people consider the retirement age to be 60, some individuals aim to achieve it early. If you're one of those who wish to retire early but aren’t sure how to do it. Then, for those, it's important to know that with strategic planning and disciplined savings, one can achieve their retirement goals in the next 12 years. Know how you can retire in just 12 years by investing Rs 20,000 a month.
How to plan for early retirement?
With careful planning and disciplined investing, anyone can achieve early retirement. Here’s how much you should invest each month to make this dream a reality.
Retire in the next 12 years
To retire in 12 years, you need to estimate the duration of your retirement and the corpus required.
For instance
For instance, if you're 38 and want to retire at 50 with a monthly pension of Rs 72,000, you’ll need a retirement corpus of around Rs 1 crore.
How this is possible: Calculation
To build this corpus, start investing Rs 20,000 monthly in mutual funds through a Step Up SIP (Systematic Investment Plan), where you need to increase your investment amount by 10 per cent every year.
Accumulate Rs 1,00,48,683 in 12 years
With an average annual return of 12 per cent, you could accumulate an estimated corpus of about Rs 1,00,48,683 in 12 years.
How Systematic Withdrawal Plan (SWP) helps
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount regularly from your mutual fund investments, providing you with a steady income.
SWP
By strategically investing in mutual funds and using an SWP, you can retire early and enjoy a comfortable life with a substantial pension.
How to get Rs 72,000 monthly pension
At age 50, with a corpus of Rs 1,00,48,683, you can begin your retirement.
SWP Plan
Assuming you wish to receive a Rs 72,000 monthly pension until age 80, you need to set up a SWP plan, where you can get 8 per cent annualised return.
Withdrawing Rs 72,000 monthly pension for 30 years
If you get that return, then even after withdrawing Rs 72,000 monthly pension for 30 years (till 80 years of age), you will still have approximately Rs 18,68,427 corpus.
Early retirement and secure pension
Thus, by investing Rs 20,000 per month, you can plan for an early retirement and secure a substantial pension.
Disclaimer
(Our calculations are projections. Do your due diligence or consult an expert for retirement planning.)