Retirement Planning: In how many years your Rs 7,000 monthly SIP will grow to Rs 90 lakh, Rs 1.32 crore, and Rs 2.47 crore
Retirement Planning via SIP: Retirement planning is important for everyone, whether you're a salaried employee, a small business owner, or an individual. The importance of planning your retirement wisely cannot be overstated, as it gives you financial freedom and allows you to live life on your own terms after retirement. One of the most popular and effective ways to build a substantial retirement corpus is by investing in a Systematic Investment Plan (SIP) in mutual funds.
SIP is a disciplined investment approach where you invest regularly—either monthly or quarterly—rather than a lump sum. This method not only promotes consistent savings but also harnesses the power of compounding, potentially growing your investment over time.
Why Start Early with SIP for Retirement Planning?
One of the most effective strategies to build a significant retirement corpus through SIP is to start early. The sooner you begin investing, the more time your money has to grow. Unfortunately, many people delay their retirement planning and start investing later in life, potentially missing out on years of compounding growth.
Retirement Planning: How Long-Term SIP Investments Offer Significant Benefits
Taking the 12 per cent annualised return, which is an average return for equity funds, we can calculate how much time it will take to build Rs 90 lakh, Rs 1.32 crore, and Rs 2.47 crore corpus with Rs 7,000 monthly SIP -
Retirement Planning: In how many years your Rs 7,000 monthly SIP will grow to Rs 90 lakh
To build a corpus of Rs 90 lakh with Rs 7,000 monthly SIP, you need to invest money for 22 years, as per the calculations.
Retirement Planning: Calculation to build Rs 90 lakh corpus with Rs 7,000 monthly SIP in 22 years
So, if you invest Rs 7,000 monthly at an expected annualised return of 12 per cent for 22 years, your total investment will amount to Rs 18,48,000. In capital gains, you can expect to earn approximately Rs 72,23,272. And the total corpus at the end of 22 years is estimated to be Rs 90,71,272.
Retirement Planning: In how many years your Rs 7,000 monthly SIP will grow to Rs 1.32 crore
To build a corpus of Rs 1.32 crore with Rs 7,000 monthly SIP, you need to invest money for 25 years, as per the calculations.
Retirement Planning: Calculation to build Rs 1.32 crore corpus with Rs 7,000 monthly SIP in 25 years
At an expected annualised return of 12 per cent, if you invest Rs 7,000 monthly for 25 years then you will invest a total amount of Rs 21,00,000. In terms of capital gains, you can expect to earn approximately Rs 1,11,83,446. And the total corpus at the end of 25 years is estimated to be Rs 1,32,83,446.
Retirement Planning: In how many years your Rs 7,000 monthly SIP will grow to Rs 2.47 crore
To build a corpus of Rs 2.47 crore with Rs 7,000 monthly SIP, you need to invest money for 30 years, as per the calculations.
Retirement Planning: Calculation to build Rs 2.47 crore corpus with Rs 7,000 monthly SIP in 30 years
So, if you invest Rs 7,000 monthly at an expected annualised return of 12 per cent for 30 years then you will invest a total amount of Rs 25,20,000. Regarding capital gains, you can expect to earn approximately Rs 2,21,89,396. And the total corpus at the end of 30 years is estimated to be Rs 2,47,09,396.
SIP Investment: Notable Point
It’s important to understand that SIP is a market-linked investment, meaning returns are not guaranteed. The 12 per cent return mentioned here is an estimate, and actual returns may fluctuate depending on market conditions.
For example: Retirement Corpus at 13%, 14%, and 15% annualised return for 22 years
If your investments yield a 13 per cent return, your total could rise to Rs 1,05,77,834 after 22 years. Similarly, if your investments yield a 14 per cent and 15 per cent return, your total could rise to Rs 1,23,66,974 and Rs 1,44,94,613 respectively after 22 years.
Conclusion: Power of Early and Consistent SIP Investments
Remember, the earlier you begin, the greater your corpus will grow, ensuring you can live your retirement years on your terms.