Starting SIP At 25? How much can Rs 5,000, Rs 7,000, and Rs 9,000 monthly investments generate for your retirement?
Are you in your 20s, thinking of entering the world of investment and starting your journey by investing in a systematic investment plan? Find out how much you can generate by investing Rs 5K to Rs 9K monthly. How massive a corpus can you build by the time you retire?
Even a small amount can do wonders. If your goal is to build a sizeable corpus for your golden years, that is retirement, a monthly SIP of Rs 5,000, Rs 7,000, and Rs 9,000 can help you get there. The key is to start early, stay disciplined, and give your investments enough time to grow. In this article, we will explore how long it would take for a monthly Systematic Investment Plan (SIP) of Rs 7,000 and the rest of the amount mentioned above to generate a sizeable corpus.
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DISCLAIMER: Not financial advice; invest at your own risk
Understanding SIP
SIP stands for a Systematic investment plan that allows the investors to invest a fixed amount in a mutual fund scheme at regular intervals.
Investment in a Systematic Investment Plan (SIP)
The investment in SIP can be done according to the choice of the investor’s investment capacity- daily, weekly, monthly, quarterly, half-yearly, or yearly.
What is power of compounding in SIP?
The power of compounding in SIP helps your wealth grow over time. The returns earned on the previous investments are reinvested, creating a snowball effect.
Why go for early investment?
Starting to invest early can help individuals meet their financial goals on time. It can be more advantageous for investors than starting it late. The earlier you start investing, the more time your money has to grow through compounding.
Benefits of compounding
Compounding can help you build a comfortable retirement plan
Regularly investing a fixed amount can help you buy more shares when prices are low and fewer shares when prices are high, reducing the average cost
Disciplined approach
A disciplined investment with a consistent contribution can help investors create a large retirement corpus with the effect of the power of compounding.
SIP calculation conditions
Target corpus: ?
Monthly investments: Rs 5,000, Rs 7,000, and Rs 9,000
Annualised return: 12 per cent per annum
Investment period: 35 years (25+35=60, retirement age)
What will be your retirement corpus with Rs 5,000 monthly investment for 35 years?
The estimated retirement corpus will be Rs 2,75,54,156. During that time, the invested amount will be Rs 21,00,000, and the estimated capital gains will be Rs 2,54,54,156.
What will be your retirement corpus with Rs 7,000 monthly investment for 35 years?
The estimated retirement corpus will be Rs 3,85,75,818. During that time, the invested amount will be Rs 29,40,000, and the estimated capital gains will be Rs 3,56,35,818.
What will be your retirement corpus with Rs 9,000 monthly investment for 35 years?
The estimated retirement corpus will be Rs 4,95,97,480. During that time, the invested amount will be Rs 37,80,000, and the estimated capital gains will be Rs 4,58,17,480.