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What is the best monthly systematic investment plan for working professionals to eventually build a Rs 1 crore corpus at retirement age?
How to reach Rs 1 crore at 60 via mutual fund SIPs. (Representative Image)
The power of compounding attracts and encourages a lot of investors to kickstart their financial management journey. Earning profits not just on the principal sum but also the return on investment is called compounding, which helps raise your assured money multiple times over a long period.
Money compounding is an integral part of a systematic investment plan (SIP), where you invest a fixed amount regularly. While SIPs are not exclusive to any financial instrument or asset, investing a fixed amount regularly in mutual funds is considered the best means to compound wealth and build a significant enough corpus for your future needs, including financial freedom at the point of retirement.
For those eyeing the Rs 1 crore mark at the end of their professional days, starting a monthly SIP as early as possible could be highly beneficial. Investments through SIPs can be done daily, weekly, monthly, quarterly, half-yearly and yearly, depending on an individual’s choice and financial standing. Here is how long it would take you to reach a Rs 1 crore corpus at retirement via monthly SIPs in Rs 5,000,
Rs 10,000, Rs 15,000 and Rs 20,000 brackets.
If you’re looking to start low with a monthly SIP of Rs 4,000-5,000, the investment period to acquire a sum that surpasses the 1 crore mark will stretch up to 27 years. Such investors need to start investing at the age of 33 to be left with an estimated retirement fund of close to Rs 1.8 crore. For those willing to pay Rs 10,000 and 15,000 in monthly SIPs, the investment period will last up to 21 and 18 years, helping you accumulate Rs 1.04 and Rs 1.07 crore, respectively, at retirement age.
If you’re okay spending Rs 20,000 in monthly mutual fund SIPs, the investment period will span across 16 years from a maximum age of 44. It shall help you accumulate Rs 1,09,16,193 at retirement. The calculation is based on expectations of 12 per cent annual returns. However, mutual fund investments are subject to market risks. Investors should consult an experienced financial advisor before going ahead with a scheme.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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