Retirement Planning: Can you build Rs 2 crore corpus with SIPs of Rs 4,000, Rs 6,000, and Rs 12,000? Know calculations
Retirement Planning: A systematic investment plan (SIP) is a popular method for mutual fund investment. It is a systematic investment that may look small when you start a monthly SIP of Rs 2,000, Rs 3,000, or Rs 5,000.
Retirement Planning/SIP Returns: A systematic investment plan (SIP) is a popular method for mutual fund investment. It is a systematic investment that may look small when you start a monthly SIP of Rs 2,000, Rs 3,000, or Rs 5,000. But even if you get moderate growth on your SIP investments, small amounts can help you build a large retirement corpus. The trick here is to invest for a long duration. Early investors are likely to have an edge over late starters. In this write-up, we will show you how monthly SIP investments of Rs 4,000, Rs 6,000, and Rs 12,000 can help you build a Rs 2 crore retirement corpus.
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How SIP works
When you invest in a mutual fund through SIP, you purchase net asset value (NAV) units every month with a fixed amount. The rate of these NAVs can increase or decrease every month. So, you practically purchase different amounts of NAVs every month. As the business of the companies the mutual fund house has invested its money in increases, the rate of NAV also increases. So, if you are purchasing a NAV at Rs 10 today and buying the same at Rs 100 a few years later, the one purchased earlier will have more proportion in the growth of your SIP returns. That's why the longer you stay, the higher the retirement corpus you may build.
Retirement Planning
Through SIP investment, you can target any amount for your retirement planning depending on your investment capacity, risk appetite, and the duration. Here, we are taking the target of a Rs 2 crore retirement corpus.
SIP investment conditions
We will take Rs 4,000, Rs 6,000, and Rs 12,000 as monthly SIP investments for our projection. We will keep the SIP growth rate at 12 per cent. We will keep the retirement age as 60 years. We will show you how many years it may take to build a Rs 2 crore corpus in each case.
Retirement Planning: How to build Rs 2 crore corpus through Rs 4,000 monthly SIP
If you are starting with a Rs 4,000 monthly SIP, it will take 35 years to build over Rs 2 crore corpus. It means one needs to start investing at 25 years old.
Retirement Planning: How to build Rs 2 crore corpus through Rs 4,000 monthly SIP
In 35 years, your investment will be Rs 16,80,000, estimated long-term capital gains will be Rs 2,03,63,325, and the total expected amount will be Rs 2,20,43,325.
Retirement Planning: How to build Rs 2 crore corpus through Rs 6,000 monthly SIP
If you are starting with a Rs 6,000 monthly SIP, it will take 31 years to build over Rs 2 crore corpus. It means one needs to start investing at 29 years of age.
Retirement Planning: How to build Rs 2 crore corpus through Rs 6,000 monthly SIP
In 29 years, your investment will be Rs 22,32,000, estimated long-term capital gains will be Rs 1,85,48,739, and the total expected amount will be Rs 2,07,80,739.
Retirement Planning: How to build Rs 2 crore corpus through Rs 12,000 monthly SIP
If you are starting with a Rs 12,000 monthly SIP, it will take 25 years to build over Rs 2 crore corpus. It means one needs to start investing at 35 years of age.
Retirement Planning: How to build Rs 2 crore corpus through Rs 12,000 monthly SIP
In 25 years, your investment will be Rs 36,00,000, estimated long-term capital gains will be Rs 1,68,26,479, and the total expected amount will be Rs 2,04,26,479.