Retirement Planning: Monthly savings Rs 5,000; in how many years you can achieve Rs 2 crore retirement corpus goal
A planned retirement is better than making a fluster purchase of retirement schemes at the last moment. Therefore, today we will be discussing how many years it will take for an investor to build Rs 2 crore retirement corpus by investing Rs 5,000 monthly in SIP.
It is never too early or never too late to start a retirement plan. It is a strategy for long-term savings, investing, and withdrawing the corpus at the time of retirement or receiving it as a monthly retirement pension, or both. So, if your monthly savings are Rs 5,000, as an investor, you can build a corpus of Rs 2 crore; check, in how many years you will be able to do that.
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(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning)
Retirement planning
Retirement planning is one’s preparation for a good life after they are done working for a full-time job. To create a retirement plan, one should begin by determining their long-term financial goals and risk appetite. Starting investing earlier would be better than starting late.
Retirement planning through monthly SIP
A systematic investment plan (SIP) enables investors to build wealth over time by investing a fixed amount at regular intervals such as daily, weekly, monthly, half-yearly, or yearly. Investors can adjust their investment amounts based on their finances. They can also stop or restart their SIP if they so choose.
Mutual fund SIP calculation conditions
We will take the 20 per cent of monthly income as an investment amount. So, for Rs 25,000 monthly salary, the monthly SIP investment will be Rs 5,000. We are expecting 12 per cent annualised return on the SIP investment.
How much will you earn in 32 years with Rs 5,000 monthly SIP?
Expected Return Rate: 12 per cent
Time Period: 32 years
Total Invested Amount: Rs 19,20,000
Estimated capital gains: Rs 2,06,26,485
Estimated retirement corpus after 32 Years: Rs 2,25,46,485
Retirement corpus
For someone who is earning Rs 25,000 a month and is starting mutual fund SIP investment at 25 years of age with a Rs 5,000 monthly SIP, they can create an estimated retirement corpus of Rs 2 crore by 57.
How much will be the retirement corpus in 10 years?
In 10 years, the investment amount through the monthly SIP will be Rs 6,00,000, the estimated capital gains will be Rs 5,61,695, and the estimated retirement corpus will be Rs 11,61,695.
How much will be retirement corpus in 20 years?
The invested amount during this period will be Rs 12,00,000, estimated capital gains will be Rs 37,95,740, and the estimated retirement corpus will be Rs 49,95,740.
How much will be retirement corpus in 32 years?
The magic of compounding will be more clear in 32 years as the invested amount will be Rs 19,20,000, estimated capital gains will be Rs 2,06,26,485, and the estimated retirement corpus will be Rs 2,25,46,485.