Retirement Planning Tips: If you want to have enough money to live your life well, you will have to prepare for it from now on. The sooner you start, the more money you can save for retirement. Let’s try to understand how long it will take to create a retirement fund of Rs 1 crore by investing Rs 10,000 every month in a Systematic Investment Plan (SIP).
For a retirement fund of Rs 1 crore, here we will calculate the return on investment based on annual rates of 10%, 12% and 14%. Past trends regarding mutual fund SIP returns suggest that a CAGR of 10-14% is moderate and can be easily achieved. Let’s see how a 25-year-old investor can invest Rs 10,000 every month and earn Rs 1 million at different rates of return.
SIP: 10% annual return
Time to reach Rs 1 crore fund: 22.5 years (age 47.5 years)
Total investment: Rs 27 lakh
Estimated profit: Rs 74.64 lakh
Total funds in 22.5 years: 1.02 crores
In this sense, a 25-year-old person can become a millionaire in 22.5 years by investing Rs 10,000 per month in mutual funds through SIP.
SIP: 12% annual return
Time to reach Rs 1 crore fund: 20 years (45 years)
Total investment: Rs 24 lakh
Potential return: Rs 76 lakh
Total fund: 1 million rupees
A retirement fund of Rs 1 million can be achieved in 20 years with an investment of Rs 10,000 per month with an annual return of 12%.
SIP: 14% annual profitability
Time to reach Rs 1 crore fund: 18.5 years (age 43.5 years)
Total investment: Rs 22.2 lakh
Potential profitability: Rs 83 lakh
Total fund: 1.05 crores
With a 14% return on investments of Rs 10,000 every month, investors can achieve a corpus of Rs 1 crore in just 18.5 years.
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