Retirement Planning: How long it will take to build Rs 50,000,000 corpus with Rs 8,000 monthly investment?
When you start earning, retirement planning may not be an immediate concern for you. One easily slides this thought and puts it off, believing it is not the right time to start planning for retirement. But one must never forget ‘Prevention is better than cure’, it is better to stay prepared than to be sorry later. An early practice of investment is a healthy start. Therefore, let’s understand how a monthly investment of just Rs 8,000 can help you create a Rs 5 crore retirement corpus.
We may know what our life will look like after retirement. No matter how it is, we all need strong financial support to maintain our standard of living. Retirement planning simply means setting income goals for post retirement life and determining the steps necessary to achieve them. In this article, we will find out how a monthly investment of Rs 8,000 in a systematic investment plan (SIP) can help one create a retirement corpus of Rs 5 crore. Let’s understand through calculations.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is retirement planning?
Retirement planning simply means getting ready for life after you stop working, either retired from a full time job or a business.
Why plan for retirement?
One retires from work not life, they may have some dreams post retirement. At the same time, they also have to maintain their standard of living. So to fulfill all these factors one should go for retirement planning to prepare themself for the best.
Benefits of planning for your retirement
Independence
Financial security
Peace of mind
Retirement planning stages
Young adult (Age 21-35)
Early midlife (Age 36-50)
Later midlife (Age 50-60)
Retirement planning through monthly SIP
A systematic investment plan (SIP) is a method of investing a fixed amount in a mutual fund SIP at regular intervals such as daily, weekly, monthly, half-yearly, or yearly. Investors can adjust their investment amounts based on their finances.
Retirement Planning Calculations
Target corpus: Rs 5 crore
Monthly investment: Rs 5,000
Annualised return: 12 per cent
How long it will take to build the retirement corpus of Rs 5 crore
It will approximately take 35 years to reach this target corpus.
How much will be retirement corpus in 10 years?
In 10 years, the invested amount will be Rs 9,60,000, the estimated capital gains will be Rs 8,98,713, and the estimated retirement corpus will be Rs 18,58,713.
How much will be retirement corpus in 20 years?
The invested amount will be Rs 19,20,000, the estimated capital gains will be Rs 60,73,183, and the estimated retirement corpus will be Rs 79,93,183.
How much will be retirement corpus in 30 years?
The invested amount will be Rs 28,80,000, the estimated capital gains will be Rs 2,53,59,310, and the estimated retirement corpus will be Rs 2,82,39,310.
How much will be retirement corpus in 35 years?
The invested amount will be Rs 33,60,000, the estimated capital gains will be Rs 4,86,02,153, and the estimated retirement corpus will be Rs 5,19,62,153.