Mutual Fund SIP: 35 years old and want to accumulate Rs 5 crore fund at retirement? Know how much should you invest in monthly SIP; understand with calculations
SIPs allow you to invest a certain amount at regular periods, which can help you create the habit of saving and investing frequently.
SIP (Systematic Investment Plan) helps you save money in many ways. In SIP, you don't need to check market timings as you invest every month. It enables you to develop regular investing habits.
Here are some benefits of mutual fund SIP.
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Rupee cost averaging
SIPs let you continue investing regardless of market conditions, which might assist you buy more units when the market collapses.
In SIP, you can avoid market timing
SIPs can also assist you avoid the temptation to time the market and invest a lumpsum amount.
SIPs help you become a regular investor
SIPs allow you to invest a certain amount at regular periods, which can help you create the habit of saving and investing frequently.
Flexibility
SIPs allow you to pause, cancel, or start SIP anytime. There are very less restrictions.
Automation
You can also set automation for SIP amount deduction in your bank account.
Minimum amount to start with
You can start with Rs 1,000 per month.
Power of compounding
The compounding effect dramatically increases your investments over time, converting even little contributions into huge funds.
Diversification
SIPs promote diversification by distributing investments over several assets to reduce risk.
Know your monthly SIP amount to accumulate Rs 5 crore retirement fund
Suppose your age is 35 and you invest continue till age 60. In 25 years, if you invest Rs 26,500 every month in SIP, you will invest a total of Rs 79,50,000.
Understand with calculations
Invested amount: Rs 79,50,000
Expected returns: 12%
Estimated returns: Rs 4,23,37,330
Maturity amount: Rs 5,02,87,330