Know the right time to start investing, you can raise up to Rs 10 crore by the age 50
You can deposit up to Rs 10 crore till the age of 50 years. Jitendra Solanki, Registered Tax and Investment Specialist with SEBI says, “Building a retirement corpus of Rs 10 crore by the age of 50 requires financial discipline and investment planning at an early stage of one’s career. If the person wants to retire by the age of 50 then he has to start investing in the retirement fund by the age of 25. At this age, one would be earning, but the chances of having a huge amount for investment are less. Mutual Fund SIP is the best option. You have to invest for a long time to fill the ocean drop by drop.”
The retirement age in India is generally considered to be 60 and people save money keeping this in mind. However, one can retire earlier provided he has saved enough for the rest of his life. According to tax and investment experts, if one wants to retire early, he/she has to start investing early or say at least till the age of 25. He further added that Mutual Fund SIP (Systematic Investment Plan) is something that will help them to accumulate a large amount with small monthly investments, but the investment should be for a longer duration.
SIP investment strategy will help the investor to meet his investment goal. Karthik Jhaveri, Transcend Consultants said, “SIP alone may not be able to meet such an ambitious investment target, as mutual fund SIPs have returns of 12-15 percent. Monthly SIPs have 10 per cent annual step-up This will help the investor to reach the target of Rs 10 crores.”
He added that in long-term investments, an annual increase in monthly SIP will help the investor to maximize the compounding return on his investment. As per the mutual fund SIP calculator, if a person starts SIP at the age of 25 with a 12 percent annual return and investment target of Rs 10 crores, the monthly investment will be around Rs 26,000 if the annual step-up rate is 10 percent.
10.02 crore will be available from a monthly SIP of 14,750
To achieve an investment target of Rs 10 crore by the age of 50, Jitendra Solanki said, “It cannot be easy to invest Rs 26,000 every month at the age of 25. When he turns 50, it is not easy for him. Some financial discipline and commitment towards investment goals are required. In that case, my advice to the investor is to increase one’s annual step-up rate by 15 percent instead of starting with a monthly SIP of Rs 26,000. ”
According to Solanki, if an investor starts a SIP at the age of 25 with an investment target of Rs 10 crores assuming 12 percent annual return, but the annual step-up rate is 15 percent, then a monthly SIP of Rs 14,750 will cost the investor Rs 10,02,55,880 or Rs 10.02 crore.