Building a massive retirement corpus requires commitment and consistency. If you fluctuate in your investment strategy, you may not be able to create a sizeable corpus by the end of the investment period. Thus, discipline and consistency are the keys to achieving your target amount. Regardless of the fixed amount you decide to invest monthly, even an average investment of Rs 11,000 can help you build Rs 13 crore. Let’s find out how.
What is SIP?
A systematic investment plan is an investment scheme where you can invest a fixed amount in mutual funds either daily, weekly, monthly, quarterly, or yearly, depending on your choice.
Why you should invest in SIP
SIP is perfect for beginners. You can start investing with as little as Rs 100. Plus, it’s easy and hassle-free. Once you set it up, the money is automatically deducted, so you’ll never miss an investment.
Why early investment matters
If you want to get the most out of your investments, you should start investing as early as possible. Let’s look at an example to see why this makes a big difference.
Example of early investment
Rahul starts investing Rs 1,000 per month at age 20.
After 40 years, he gets an estimated Rs 1.18 crore.
His friend, Rohan, starts investing Rs 1,000 per month at age 30.
After 30 years, he gets Rs 35 lakh.
Rahul started 10 years earlier and got 3 times more returns.
SIP calculations
- Target corpus: Rs 13 crore
- Monthly investment: Rs 11,000
- Annualised return: 12 per cent
How long it will take to build Rs 13 crore with Rs 11,000 monthly SIP
It will take approximately 40 years to generate Rs 13 crore.
How much can Rs 11,000 monthly SIP build in 10 years?
The investment amount will be Rs 13,20,000, the capital gains will be Rs 12,35,730, and the estimated retirement corpus will be Rs 25,55,730.
How much can Rs 11,000 monthly SIP build in 20 years?
The investment amount will be Rs 26,40,000, the capital gains will be Rs 83,50,627, and the estimated retirement corpus will be Rs 1,09,90,627.
How much can Rs 11,000 monthly SIP build in 30 years?
The investment amount will be Rs 39,60,000, the capital gains will be Rs 3,48,69,052, and the estimated retirement corpus will be Rs 3,88,29,052.
How much can Rs 11,000 monthly SIP build in 40 years?
The investment amount will be Rs 52,80,000, the capital gains will be Rs 12,54,26,623, and the estimated retirement corpus will be Rs 13,07,06,623.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
