Retirement Planning: When we talk about retirement, an early starter has a significant edge over a late starter. If an early starter is consistent in their investment, they can create a much larger retirement corpus with a small monthly contribution compared to a person who is a late starter and is having a larger monthly investment.
Retirement Corpus Target Rs 6 Crore: A Rs 6 crore retirement corpus seems to be a large amount for a person who is starting their career. But if the same person starts investing from the beginning of their job itself, even a Rs 6 crore retirement corpus can be achieved with consistent investing. If one starts retirement planning early, they will have a significant edge over someone who is starting their investment journey late. The reason is that even if both are investing in the same investment scheme where they get the same compound interest or growth, the early starter will get extra years for compound growth, which will help them build a larger corpus compared to the second one. In this write-up, we will tell what can be the monthly contribution to reach a Rs 6 crore retirement corpus if one starts their investment journey at 30, 35, or 40 years of age.
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(Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for retirement planning.)
How early starter takes edge
Take the example of 2 persons. A starts investing at 25 years of age, and B starts at 35 years of age. Both are targeting a Rs 5.50 crore corpus by 60 years of age, and each expects 12 per cent annualised returns on their mutual fund SIP investments.
How early beginner takes edge
While A needs Rs 10,000 monthly SIP investment to reach that target after a total investment of Rs 42,00,000, in 35 years, B needs Rs 32,500 monthly investment to achieve that goal after a total investment of Rs 97,50,000 in 25 years. Just 10 years of delay forced B to invest more than twice as much as A to achieve the same retirement target.
What we will do for our calculations
Since we are considering 30, 35, and 40 years as the age to begin investment, we are assuming the age of 60 to end it. So, investment horizons that we will calculate for will be 30 years, 25 years, and 20 years. We will calculate as per 12 per cent and 14 per cent annualised growth on the investment.
SIP investment to reach Rs 6 cr target if one starts investing at 30 (at 12% growth)
The estimated monthly SIP investment to reach the Rs 6 crore retirement target will be Rs 19,500.
SIP investment to reach Rs 6 cr target if one starts investing at 30 (at 12% growth)
The total investment in 30 years will be Rs 70,20,000, the estimated long-term capital gains will be Rs 5,30,58,978, and the estimated retirement corpus will be Rs 6,00,78,978.
SIP investment to reach Rs 6 cr target if one starts investing at 35 (at 12% growth)
The estimated monthly SIP investment to reach the Rs 6 crore retirement target will be Rs 35,300.
SIP investment to reach Rs 6 cr target if one starts investing at 35 (at 12% growth)
In 25 years, the total investment will be Rs 1,05,90,000, the estimated long-term capital gains will be Rs 4,94,97,892, and the estimated retirement corpus will be Rs 6,00,87,892.
SIP investment to reach Rs 6 cr target if one starts investing at 40 (at 12% growth)
The estimated monthly SIP investment to reach the Rs 6 crore retirement target will be Rs 65,250.
SIP investment to reach Rs 6 cr target if one starts investing at 40 (at 12% growth)
The total investment in 20 years will be Rs 1,56,60,000, the estimated long-term capital gains will be Rs 4,43,60,692, and the estimated retirement corpus will be Rs 6,00,20,692.
SIP investment to reach Rs 6 cr target if one starts investing at 30 (at 14% growth)
The estimated monthly SIP investment to reach the Rs 6 crore retirement target will be Rs 13,050.
SIP investment to reach Rs 6 cr target if one starts investing at 30 (at 14% growth)
The total investment in 30 years will be Rs 46,98,000, the estimated long-term capital gains will be Rs 5,53,27,049, and the estimated retirement corpus will be Rs 6,00,25,049.
SIP investment to reach Rs 6 cr target if one starts investing at 35 (at 14% growth)
The estimated monthly SIP investment to reach the Rs 6 crore retirement target will be Rs 25,600.
SIP investment to reach Rs 6 cr target if one starts investing at 35 (at 14% growth)
In 25 years, the total investment will be Rs 76,80,000, the estimated long-term capital gains will be Rs 5,23,42,791, and the estimated retirement corpus will be Rs 6,00,22,791.
SIP investment to reach Rs 6 cr target if one starts investing at 40 (at 14% growth)
The estimated monthly SIP investment to reach the Rs 6 crore retirement target will be Rs 51,500.
SIP investment to reach Rs 6 cr target if one starts investing at 40 (at 14% growth)
The total investment in 20 years will be Rs 1,23,60,000, the estimated long-term capital gains will be Rs 4,80,73,918, and the estimated retirement corpus will be Rs 6,04,33,918.