From Rs 20,000 SIP to Rs 2.51 lakh monthly: How SIP-SWP strategy can secure your retirement
SIP and SWP together can help build a strong retirement corpus and ensure a steady monthly income. Learn how investing Rs 20,000 monthly can generate Rs 2.51 lakh pension for 30 years.
Planning for retirement? A combination of Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP) can help you achieve financial independence. By investing Rs 20,000 per month for 25 years, you can build a Rs 3.79 crore corpus, which can then be used to generate Rs 2.51 lakh monthly income for 30 years. This strategy ensures wealth creation and a steady pension while keeping your investment growing. Let’s explore how SIP and SWP can secure your financial future effortlessly!
What is SWP?
A Systematic Withdrawal Plan (SWP) allows investors to withdraw a fixed amount regularly while keeping their investment intact, ensuring a steady income.
How SWP works?
You can set up SWP in equity, hybrid, or debt mutual funds, but a low-risk debt or conservative hybrid fund is ideal for stable withdrawals.
Rupee cost averaging with SWP
When markets are high, fewer units are sold; when markets are low, more units are sold—this balances overall returns.
Benefits of SWP
Offers flexible withdrawals, serves as an emergency fund, and ensures a reliable monthly income for retirees.
What is SIP?
A Systematic Investment Plan (SIP) allows investors to invest a fixed amount at regular intervals, starting from Rs 100, helping build long-term wealth.
How SIP helps in retirement planning?
Investors build a retirement corpus through SIP and withdraw it in the form of a monthly pension via SWP.
SIP investment plan
Investing Rs 20,000 per month for 25 years at 12% annual returns grows to Rs 3.79 crore.
SWP pension plan
Using the Rs 3.79 crore corpus, an investor can withdraw Rs 2.51 lakh per month for 30 years while earning 7% returns.
Total payout over 30 years
The investor receives Rs 9.03 crore in pension while still retaining Rs 44,049 at the end.
Why combine SIP and SWP?
This strategy ensures financial independence post-retirement, offering steady income while allowing corpus growth.