SIP is a disciplined way of investing in mutual funds. In which you can start with 500 rupees a month. You can plan investment by considering a fixed amount based on your future.
Systematic Investment Plan, also known as SIP, is a disciplined way of investing in mutual funds. But before investing, one should always keep inflation in mind while investing and then decide on investment goals. Now the question is, now what is the amount that you can invest and earn Rs 2.5 lakh during retirement.
Let us tell you that SIP allows investors to put in a fixed amount in the selected mutual fund scheme at pre-determined intervals. The amount can start from Rs 500, which you can invest on a weekly, monthly, quarterly, half yearly or yearly basis. This plan can deliver higher long term benefits than average cost and compounding.
A retired person belonging to a middle class family needs around Rs 40,000 per month. In such a situation, if the inflation rate is 6 to 6.5 percent per annum, then the monthly expenditure of Rs 40,000 every month after 30 years or retirement is expected to reach about Rs 2.5 lakh. Experts recommend SIP to every working person to secure their life after retirement.
How much SIP is required to get 2.5 lakh monthly? : Optima Money Managers founder and CEO Pankaj Mathpal requires Live Mint reports that SIP investment monthly 2.5 lakh to Rs 5 crore at the age of sixty years to earn in. If the investor starts investing at the age of 30, then by the age of 60 he will have 30 years to invest and will have a corpus of around Rs 5 crore.
Investing Rs 11000 per month: Mathpal told Live Mint that however, keeping in mind the risk appetite of an investor, he would keep the lowest possible mutual fund SIP return of 8 per cent and annual step-up of 10 per cent. An investor needs to start investing 11,000 in monthly SIPs for the next 30 years.
Invest in SWP as well: Even after investing in SIP schemes, a person should invest the amount in SWP i.e. Systematic Withdrawal plan for the next 20 years. If the inflation rate is 6 per cent and the post-retirement return is 8 per cent, one can expect to get Rs 2.5 lakh per month for the next 20 years using 4 per cent withdrawal from SWP.
