Your ₹14500 monthly SIP can become ₹22.93 crore
Mutual fund calculator: A smart investor don’t do different thing but he invests differently. When it comes to retirement planning or long-term investment, a smart investor manages to accumulate more money with some adaptation in the available investment option. For example, a lot of people invest in mutual funds in monthly SIP (systematic investment plan) mode, but how many of them are disciplined in their investment increase their monthly SIP in sync with their annual income growth?
Speaking on the benefit of annual step-up in monthly SIP, SEBI registered tax investment expert Jitendra Solanki said, “If a SIP investor starts investing at the age of 25 continues investing till his retirement, then he will be able to invest for long 35 years. In this period the investor will be able to avail compounding benefit. Annual step-up helps the investor maximise one’s compounding benefit accumulate whopping retirement fund after starting with a small monthly investment.”
On mutual fund SIP return that one can expect in long 35 years of investment Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, “On can expect to get around 12 to 16 per cent return on one’s SIP for such 35 year long period.” Jhaveri said that if someone starts investing in SIP, then its goal at the time of redemption should be more than ₹20 crore as one needs to beat the annual inflation during post-investment period.
So, assuming ₹14,500 monthly SIP at the age of 25, if an investor continues investing till he turns 60, then at 12 per cent annual return with 10 per cent annual step-up, the investor would be able to accumulate ₹22,93,56,845 or ₹22.93 crore.
Hence, this annual step-up in one’s SIP has the power to help an investor retire rich or may be retire before turning 60.
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