SIP: How can SIP become your million-dollar companion in retirement planning? This strategy will do wonders..

Nowadays, it's crucial to plan for retirement while still employed. When you have no other source of income after retirement, your savings will be crucial. But before planning for retirement, consider how many years of service you have left.

SIPs are a good option for building a retirement corpus these days, as they can create a substantial corpus over the long term. However, you should tailor your SIP roadmap based on your age and remaining years of service, ensuring a comfortable old age after retirement.

First, do this calculation:

Suppose you want to accumulate a corpus of ₹1 crore by the age of 60. Subtract your age from 60 to find the amount of time you have to accumulate. You'll need to invest accordingly. So, if you're 25 years old, you have 35 years until retirement. If you're 30, then it's 30 years old, and if you're 35, it's 25 years old. Now, let's look at the calculations:

Are you 25? If you have 35 years left in your job, then...
If you're 25 and have 35 years left in your job, you can start your journey with a SIP of just ₹2,000.

Total investment: ₹840,000 (2,000 x 12 x 35)
Estimated interest (12%): ₹1,01,81,662
Total amount at age 60: ₹1,10,21,662
This is the magic of SIPs. A monthly investment of just ₹2,000 can accumulate a corpus of over ₹1 crore.

Are you 30? If you have 30 years of service left...
If you are 30 years old and have 30 years left until retirement, you should start a SIP of at least ₹3,500 per month.

Total investment: ₹1,260,000
Estimated interest (12%): ₹9,523,406
Total amount at age 60: ₹1,07,83,406
Are you 35 years old? If you have 25 years left...
If you are 35 years old and have only 25 years left until retirement, you will need to almost double your SIP amount.

SIP: ₹6500 per month
Total investment: ₹19,50,000
Interest (12%): ₹91,14,343
Total amount (at age 60): ₹1,10,64,343
Why is SIP the best retirement plan?
The magic of compounding: The longer the tenure, the higher the returns.
Disciplined investment: Investing every month becomes a habit.
Low risk, better returns: Mutual fund SIPs are less risky than direct stock investments.

12% average return: Much higher than government schemes.
Remember, returns are not guaranteed because SIPs are market-linked, but they prove to be quite effective in the long term.

Keep this in mind:
Inflation gradually erodes the value of money. The money you spend today may not be enough to meet your future needs. If you're accumulating ₹1 crore for retirement, be sure to first understand its future value. You can use an inflation calculator for this. The calculations here assume a deposit of ₹1 crore. If you want to add more, you'll need to invest more. Also, keep in mind that the SIP calculations here assume an assumed return of 12 percent. This return may be higher or lower depending on market conditions.

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