Working in a private company necessitates planning for life after retirement well in advance. This proactive approach provides a substantial time frame for investing, ensuring you can meet your financial needs in old age. Currently, numerous schemes offer the benefits of compounding, meaning that the more you invest, the greater your potential returns. Mutual Fund SIP is a highly popular investment scheme, despite its market-related nature. It involves less risk compared to directly investing in stocks and offers the long-term benefit of rupee cost averaging. The average return on SIP investments is around 12 percent, leading to substantial growth of investors' money over time. Investors can start with as little as Rs 2000 through SIP, making it an accessible option for many.
What needs to be done?
If you are investing in a SIP, start doing so alongside your job. For example, if you begin investing at age 25, you will have 35 years to build a retirement fund, as you can invest until age 60. To maximize returns, implement a 10 percent annual top-up on your investment. Suppose you start at age 25 with Rs 2,000. For the first year, you will invest Rs 2,000 and increase this amount by 10 percent each subsequent year. This way, as your salary increases, your investment grows by 10 percent annually, accelerating your wealth accumulation.
Investing in an SIP starting at Rs 2,000 for 35 years with a 10% annual top-up will take your total investment to Rs 65,04,585. With an average return of 12 percent, you will earn Rs 2,90,29,294 in interest. After 35 years, your total amount, including the invested sum and interest, will be Rs 3,55,33,879. If the interest rate is 15 percent, the profit will nearly double, resulting in a total of Rs 6,70,24,212.