Want Rs 3 Crore Corpus? What should be your monthly SIP investment to achieve this target in 20, 25, and 30 years?
A systematic investment plan (SIP) is an effective way to build a large retirement corpus. Therefore, discover how much one needs to invest monthly in mutual fund SIP to build a retirement corpus of Rs 3 crore in 20, 25, and 30 years.
When we start earning, we want to live a life that we had fancied. We spend our hard-earned money on purchasing expensive brands and investing is hardly on our mind. There is no problem with spending on the luxuries of life, but not at the cost of investment. While luxuries may give you earthly pleasure, starting to invest early is likely to make your retirement journey happy and meaningful. Even building a sizeable retirement corpus won’t be impossible by investing small amounts if you begin your investment journey early.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Rs 3 crore retirement corpus
If your target is to build Rs 3 crore, SIP can be one of the most effective tools. The amount you need to invest monthly depends on your monthly income. As per 50:30:20 financial rule, one should invest 20 per cent yearly of their monthly income. In this article, we’ll explore the mutual fund SIP contributions required to reach Rs 3 crore retirement corpus in 20, 25, and 30 years.
Understanding retirement planning
Retirement planning is about preparing oneself for financial stability and security post retirement. It helps an individual live independently and maintain at least a similar standard of living after retirement.
When should you start retirement planning?
Starting early gives the individual the advantage of more compounding compared to when they begin their investment journey late. Let’s understand it with an example.
Examples of compouding
Suppose there are three friends. Ram, Mohan, and Laxman. Three of them decided to invest Rs 10,000 in monthly SIP for 20 years at 12 per cent annualised return. Their retirement corpus target is Rs 3 crore. Ram is 20 years old, Mohan is 30, and Laxman is 35 years old. Ram will achieve the target of Rs 3 crore corpus goal at the age of 40, Mohan will reach the corpus goal by 50 and Laxman will achieve the target at the age of 55. Thus, investing early can help you achieve your target efficiently.
Benefits of retirement planning
Financial security
Regular income
Emergency fund
Factors to keep in mind while planning retirement
Set retirement goals
Choose a suitable retirement plan
Retirement age
Calculations for Rs 3 crore retirement corpus
We will take 20, 25, and 30 years as investment durations. We will calculate at 12 per cent annualised return.
Monthly SIP investment to achieve Rs 3 crore corpus in 30 years (at 12 per cent return)
The estimated monthly SIP investment will be Rs 8,500. The invested amount will be Rs 30,60,000, estimated capital gains will be Rs 2,69,44,267, and the estimated corpus will be Rs 3,00,04,267.
Monthly SIP investment to achieve Rs 3 crore corpus in 25 years (at 12 per cent return)
The estimated monthly SIP investment will be Rs 15,900. The invested amount will be Rs 47,70,000, estimated capital gains will be Rs 2,54,02,398, and the estimated corpus will be Rs 3,01,72,398.
Monthly SIP investment to achieve Rs 3 crore corpus in 20 years (at 12 per cent return)
The estimated monthly SIP investment will be Rs 30,100. The invested amount will be Rs 72,24,000, estimated capital gains will be Rs 2,28,50,352, and the estimated corpus will be Rs 3,00,74,352.