Money is seen as the main support in old age. With enough savings, you won’t need to depend on others or ask for financial help. To secure your future, start retirement planning early. Calculate how much you’ll need after retirement. This way, you can enjoy a comfortable and worry-free life. Learn the key financial rules for a successful retirement plan here. In this article, we’ll show you how to make your retirement planning not just effective but also memorable and stress-free.
30X Rule for Retirement Planning
According to financial expert Deepti Bhargava, if you want to live a comfortable life in your old age, you should follow the 30X rule. This means your retirement fund should be at least 30 times your current annual expenditure. Money plays a key role in ensuring a stress-free and comfortable retirement. According to Deepti, if you want to maintain your current lifestyle even in your old age, you should follow the 30X Rule. This rule states that your retirement fund should be at least 30 times your annual expenses.
For example, if your current annual expenditure is Rs 9,00,000 (or Rs 75,000 per month), then according to the 30X rule, your retirement fund should be Rs 9,00,000 × 30 = Rs 2,70,00,000.
How to Accumulate Your Retirement Fund
Building a fund of ₹2.7 crore requires disciplined investment. You need to opt for long-term investment plans that offer good returns. Currently, mutual funds, especially through Systematic Investment Plans (SIP), are a popular choice. SIP allows you to invest a fixed amount every month, and historically, SIPs have given an average return of 12% per annum in the long run.
Investment Plan for a 30-Year-Old
If you start investing at the age of 30 and aim for a retirement fund of ₹2.7 crore, you need to:
- Start a monthly SIP of at least ₹7,700.
- Continue investing for 30 years until you turn 60.
- Over 30 years, you will invest a total of ₹27,72,000.
- With an average return of 12%, you will earn an interest of ₹2,44,08,336.
- By the time you reach 60, you will have a total fund of ₹2,71,80,336.
Investment Plan for a 35-Year-Old
If you start investing at age 35, the amount required per month increases because you have less time to accumulate your fund:
- You need to start a SIP of ₹14,500 every month.
- Continue this SIP for 25 years until you turn 60.
- Your total investment over 25 years will be ₹43,50,000.
- At a 12% annual return, you will earn an interest of ₹2,31,65,709.
- By the time you turn 60, your total fund will amount to ₹2,75,15,709.
Starting early and investing regularly is key to building a substantial retirement fund. Follow the 30X rule and plan your SIPs wisely to ensure you enjoy a comfortable and financially secure retirement.