Retirement Planning: Do you have the same aspirations as 35-year-old Delhi manager Rohit to retire early? When Rohit retires, he wants to be fifty years old and have a reliable monthly income of ₹50,000. We have a plan that can assist you in achieving the same objective of accumulating a sizeable sum of money and ensuring a comfortable retirement. Your retirement aspirations can come true if you allocate a sensible part of your income for investments.
Start with a Small Investment
It is recommended that you invest between 10 and 20 percent of your monthly income in order to get started on the path to a safe retirement. Assume that you currently make ₹50,000 a month. In this case, your monthly investment goal should be at least ₹10,000. If your pay is smaller, think about earning extra money so you can make sure you can invest this amount on a regular basis.
The Power of SIP and Step-up SIP
Using mutual fund Systematic Investment Plans (SIPs) is a fantastic approach to invest. Considering that you want to retire in 15 years, here’s a straightforward but efficient plan:
- Monthly Investment: Start by investing ₹10,000 per month in mutual funds via SIP.
- Annual Increase: Implement a step-up SIP approach by increasing your investment by 10% every year.
For example, your monthly investment is ₹10,000 in the first year. Raise this amount to 11,000 a month in the second year. Increase it to ₹12,100 a month in the third year, and keep going for 15 years.
Building a Substantial Fund
If you stick to the step-up SIP approach consistently, you have the ability to accumulate ₹1 crore in corpus over a 15-year period. How to do it is as follows:
- Yearly Contributions: Start with ₹10,000 per month, increasing by 10% annually.
- Compounded Growth: Benefit from the compounded returns of mutual funds.
This methodical technique can result in a sizable retirement savings after 15 years.
Post-Retirement Strategy for a Monthly Income of ₹50,000
Planning for a consistent monthly income is the next step after you have amassed ₹1 crore. Here’s how to do it:
- Withdraw Half: Withdraw ₹50 lakh from the accumulated fund to meet immediate needs or invest in other schemes.
- Reinvest Half: Invest the remaining ₹50 lakh in a mutual fund as a lump sum.
Assuming a 12% annual interest rate, this lump sum investment can yield about ₹6 lakh year, or ₹50,000 every month. This gives you a steady monthly income while guaranteeing that your principal amount stays the same.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
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