Retirement Planning SIP: Systematic Investment Plan (SIP) mutual fund is an investment option that helps investors achieve long-term financial goals, such as building a substantial corpus for retirement, marriage, education, etc. In this, you can invest a fixed amount at regular intervals—monthly, quarterly, or yearly, as per your capacity.
With rising inflation, are you also worried about how you will manage your future financial needs? If yes, then investing in SIP mutual funds can be beneficial. With the power of compounding, you will gain interest not only on the principal amount but on the earned capital gain as well. Let’s understand with an example:
In this write-up, we will explain, through calculations, how much time it will take to reach the Rs 5 crore target with a Rs 12,000 monthly SIP investment
Monthly SIP investment planning: How many years will it take to reach the Rs 5 crore target with a Rs 12,000 monthly SIP investment?
According to the calculations, you need to invest for at least 33 years in an SIP to build a corpus of Rs 5 crore. Let’s know how –
Suppose you are investing Rs 12,000 monthly in an SIP mutual fund for 33 years. Then in these years your total investment will be Rs 47,52,000. Assuming an average annual return of 12 per cent, your expected capital gain would be Rs 4,77,07,498. Therefore, by the end of 33 years, your total corpus would grow to approximately Rs 5,24,59,498.
Long-term mutual fund investment: Full Calculations –
- Invested Amount: Rs 47,52,000
- Capital Gain: Rs 4,77,07,498
- Total Value: Rs 5,24,59,498
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)