Retirement Planning: Monthly savings Rs 6,000; in how many years can you achieve Rs 3 crore corpus goal?
An investor can start planning for retirement as soon as they start earning. Early investment can be more beneficial in the future than starting investing late. Therefore, here you will understand how an investor can build Rs 3 crore retirement corpus by investing Rs 6,000 monthly through a mutual fund systematic investment plan (SIP).
Early investment can help investors build a large retirement corpus even if their savings are not much. An Investor can create a retirement corpus of Rs 3 crore by investing Rs 6,000 monthly through SIP in a mutual fund(s). Let’s understand what is SIP and how can you achieve the target of Rs 3 crore corpus through it.
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(Disclaimer: Our calculations are projections and not investment advice. Do you own due diligence or consult an expert for financial planning)
How can you plan a retirement at an early age?
Individuals can start planning for retirement at any age, but the earlier you start, the more time your money has to grow. As soon as you start earning, suppose at the age of 25, you can start saving money and invest it according to your financial planning. You can monitor, and adjust your contribution and also change it over time.
What is SIP?
A SIP is a method of investing in a mutual fund scheme that helps investors build a satisfactory corpus by investing daily, weekly, monthly, half-yearly, or yearly. There is no upper limit to the amount you can invest in SIP. You can start with a minimum investment of Rs 100 or more. However, most funds offer a minimum monthly SIP of Rs 500.
Mutual fund SIP calculation conditions
We will take the 20 per cent of monthly income as an investment amount. So, for Rs 30,000 monthly salary, the monthly SIP investment will be Rs 6,000. We are expecting 12 per cent annualised return on the SIP investment.
Retirement corpus
For someone who is earning Rs 30,000 a month and is starting a mutual fund SIP investment at 25 years of age with a Rs 6,000 monthly SIP, they can create an estimated retirement corpus of Rs 3 crore by 58.
How much will be the retirement corpus in 10 years?
In 10 years, the investment amount through the monthly SIP will be Rs 7,20,000, the estimated capital gains will be Rs 6,74,034, and the estimated retirement corpus will be Rs 13,94,034.
How much will be retirement corpus in 20 years?
The invested amount during this period will be Rs 14,40,000, estimated capital gains will be Rs 45,54,888, and the estimated retirement corpus will be Rs 59,94,888.
How much will be retirement corpus in 33 years?
The magic of compounding will be more clear in 33 years as the invested amount will be Rs 23,76,000, estimated capital gains will be Rs 2,81,87,989, and the estimated retirement corpus will be Rs 3,05,63,989.
In how many years, you will reach Rs 3 cr retirement corpus goal?
It will take approximately 33 years to achieve the goal with Rs 6,000 monthly SIP investment. Here’s the calculation-
Expected rate of annualised return: 12 per cent
Total invested amount: Rs 23,76,000
Estimated capital gains: Rs 2,81,87,989
Estimated retirement corpus after 33 years: Rs 3,05,63,989