It is best to start planning and investing for retirement at the right time. However, those who could not do so for some reason should not worry. Even if you start investing at the age of 45, you can still build a good corpus by the time you turn 60. Yes, you may need to put in extra effort and be more economical to save a larger amount in a short time. Since you are starting late, you might have to cut down on expenses and focus on saving and investing a significant portion of your income.
Throughout this article, we will share details on how to build a corpus of Rs 1.37 crore in 15 years with this smart SIP strategy, even if you missed retirement planning earlier.
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The success of this retirement planning strategy is based on the assumption that the average annual return on flexi and multi-cap equity mutual funds will be around 12%, while inflation may rise by 6% per year during the same period. Additionally, after retirement, if you transfer your corpus into a 50:50 equity-debt scheme, it is expected to generate an annual return of 10%. For calculation purposes, we have considered a monthly income of Rs 70,000. Based on these estimates, here’s how the retirement corpus will be accumulated over 15 years.
Retirement Corpus Calculation
- Starting Age: 45 years
- Monthly Income: Rs 70,000
- Monthly SIP (30% of income): Rs 21,000
- Annual Increase in SIP: 5%
- Expected Annual Return on SIP (Equity Fund): 12%
- Total Investment Over 15 Years: Rs 54,37,798
- Total Returns on Investment: Rs 82,76,781
- Total Corpus After 15 Years: Rs 1,37,14,579 (Rs 1.37 crore)
Monthly Income After Retirement
By the time you reach 60, a retirement corpus of approximately Rs 1.37 crore will be accumulated. If this amount is invested in a 50:50 equity-debt scheme generating a 10% annual return, it will provide an annual income of Rs 13.70 lakh, which translates to around Rs 1.14 lakh per month. Thus, even if you start investing at 45, you can secure your retirement within 15 years. However, to achieve this goal, it is crucial to save and invest consistently.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial advice. Investment returns are subject to market risks, and past performance does not guarantee future results. Please consult a financial advisor before making any investment decisions. Times Bull is not responsible for any financial investments made, as it is entirely your responsibility.