Kolkata: Retirement planning is a much-uttered but much-neglected topic in India. There is not a single soul who does not acknowledge the overriding importance of retirement planning but except a small number most do not get into retirement planning (and implementation) early. What is interesting is that if one begins investing early with a clear goal, building a significant corpus actually becomes easy.
Let’s ride the superior returns generated through the equity markets with the help of mutual funds. Let’s also consider investing through SIP (Systematic Investment Plan), which has now become the most preferred investment instrument for millions of middle class and lower middle class Indians looking for inflation-beating returns. We can use a goal based SIP calculator to determine the amount that you need to invest every month to create a few crores at 60.
How to make Rs 1 crore for retirement
A crorepati is still a dream for many. Let’s take the example of a youth who begins to invest every month at the age of 25 to build a retirement corpus of Rs 1 crore. You would be surprised that you can actually reach the goal of Rs 1 crore by investing only Rs 1,555 per month into a equity oriented mutual fund scheme. The returns assumed here is a moderate 12%. This investor will be putting in Rs 6.53 lakh as out-of-pocket investment.
How to make a retirement corpus of Rs 5 crore
Now let’s assume that the youth has set a target to creating a Rs 5 crore fund for retirement. Though the amount seems significantly higher, one does not need a huge investment every month to generate this value when one turns 60. The calculator will tell you that a SIP of Rs 7,775 will take the investor to Rs 5 crore in 35 years. In this way, he/she will put in Rs 32.65 lakh from his/her pocket.
How to make a retirement corpus of Rs 10 crore
If the retirement corpus goal is to create Rs 10 crore, the amount the youth has to invest in mutual fund SIPs is just Rs 15,550. Though the investor will put in Rs 65.31 lakh from his/her pocket, the amount of almost Rs 9.35 crore will be generated as returns. The morale of the story is that the earlier one begins to invest, the easier to sail past the financial goal. The force of compounding works best in the long term and therefore, one should start the journey early. However, one must consult a qualified personal finance advisor to select mutual fund schemes that is best suited for one.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
If you begin early, retirement becomes an easy assignment. Thanks to the mammoth force of long term compounding, one can amass a few crores easily by the time one turns 60. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
