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SIP calculator: Monthly SIP required for Rs 10 crore on retirement

SIP for Retirement fund

Early investment is crucial for a comfortable retirement. Mutual Fund SIPs offer higher returns over a longer time horizon. Making them an ideal choice for wealth accumulation. Using SIP calculator you can easily calculate returns on invested amount.

What is a mutual fund SIP?

A systematic investment plan (SIP) is a disciplined approach to investing in financial markets. It is a method of regularly investing a fixed amount of money at predetermined intervals. It is done, typically monthly or quarterly, into mutual funds or other investment instruments. SIPs offer individuals the opportunity to invest in a systematic. And a hassle-free manner, irrespective of market conditions.

Benefits of SIP

One of the key benefits of SIPs is rupee cost averaging. Since the investment amount remains constant more units are purchased when prices are low. And fewer units are purchased when prices are high. This strategy helps in reducing the average cost per unit over time. Thereby, mitigating the impact of market volatility. By investing a fixed amount regularly, SIPs also instill financial discipline. And also encourage individuals to stay invested for the long term.

SIPs provide flexibility to investors by allowing them to start with small amounts. And increase their investment gradually as their financial situation improves. This makes it an attractive investment option for individuals with varying income levels. Additionally, SIPs can be customised to align with an individual’s financial goals. Whether it is wealth creation, retirement planning, or funding education expenses.

The System of SIP management

SIPs are managed by professional fund managers who allocate the invested amount. Done across a diversified portfolio of stocks, bonds, or other assets, depending on the fund’s objective. This expertise reduces the burden of researching individual investments. And hence provide access to a professionally managed portfolio.

An example that can help you gauge the effectiveness

Let us take a look at how much monthly SIP you need to start today to reach Rs 10 crore at the time of retirement. All calculations are based on an average return rate of 12% per annum.

Starting SIP investments at the age of 25 with approximately Rs 15,000. And assuming 12% annualized returns. One can accumulate Rs 10 crore by retirement at age 60. Careful selection of mutual funds and guidance from a financial advisor are crucial for optimal asset allocation and higher returns.
At Age 30, you will be required to do a monthly SIP of Rs 28,329 to get Rs 10 crore at age 60.
However, at age 35, the SIP amount balloons to 52,697 per month to get Rs 10 crore at age 60.
At age 40, it will be a monthly SIP of Rs 1,00,085. Whereas at 45, you will need a monthly investment of Rs Rs 1,98,186 to get Rs 10 crore at age 60.
If you touch an age of 50, you will be required to do a monthly SIP of Rs 4,30,405 and at 55, it will be a SIP of Rs 12,12,322 to get Rs 10 crore at 60.

This clearly explains how important early investment is. If you are looking to reap rich rewards and retire peacefully, in a financial sense. However, to ensure that you invest wisely, it will be prudent to study the markets thoroughly. Or take advice from a financial advisor.

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