Retirement Planning: The best mantra for retirement planning is starting early. It gives you have edge over those who star late as you get mor time to experiment with investment options and you get extra time for compound growth. Investment through SIP in mutual funds provides compound growth. Know how much money you can invest in monthly SIP according to your age to accumulate more than Rs 5 crore retirement corpus.

When we earn a handsome salary package early in our career, the idea of old age or accumulating a huge retirement corpus hardly strikes our mind.

We think that everything will be fine and it your story will be have an eventful ending.

But no one can predict future. The nature of jobs are changing fast; layoffs are here to stay, plus there is no guarantee that in the old age you will have energy to work or job opportunities to grab given organisations in modern times prefer young candidates.

It is therefore necessary to have build a retirement corpus that can help you meet your expenses in old age. 

There may be various ways to build a sizeable retirement corpus if you start investing early.

Investment through systematic investment plan (SIP) is one of the options.

SIP provides rupee cost averaging and compound growth.

Rupee cost averaging helps you buy net asset value (NAV) units of a fund more in number when the market is down, and fewer when the market is up.

Compound growth may boost you returns faster as much as it gets older. 

You may have a mixed portfolio including, equity, index, ELSS and debt funds.

If you plan SIP investment with due diligence, there are high chances that you may get return much higher than the government-run guaranteed return scheme.

E.g., Nifty 50 has risen by over 14 per cent in the last 10 years, so even if one invests in index fund, they may get at least 12 per cent return in through SIPs. Considering that one may get a 12 per cent return in mutual funds, we are giving different scenarios, telling how much one need to invest through a SIP(s).    

At the age of 25

The advantage of starting SIP(s) at 25 years of age is that you will get many years for compounding growth if you want to retire at 60 years of age.

You don’t have to invest a large amount to reach the retirement corpus goal of Rs 5 crore.

If you start a SIP of Rs 8,000 at the age of 25, and run it for 35 years, your total investment will be Rs 33,60,000.

At a 12 per cent annual return, you will get Rs 4,86,02,153 as long-term capital gains from your investment.

So, at the age of 60, you will be the owner of Rs 5,19,62,153.

At the age of 30

If you want to start SIP at the age of 30, you have to invest Rs 15,000 per month.

Your investment will be Rs 54,00,000, and you will get Rs 4,75,48,707 as long-term capital gains, while your estimated total value of investment will be Rs 5,29,48,707.

At the age of 35

If you invest at the age of 35 and want to accumulate more than Rs 5 crore in 25 years, you will have to spend a good amount of money every month for 25 years.

For this, you will have to invest Rs 27,000 every month in SIP.

By investing Rs 80,000 for 25 years continuously, you will invest a total of Rs 81,00,000 in 25 years.

You will get Rs 4,31,36,147 as long-term capital gains and your estimated total value of investment will be Rs 5,12,36,147.