Nivesh ka tarika | SIP in Mutual Funds : Want to earn more than Rs 1.50 lakh per month? Know how much you have to invest, want to earn more than Rs 1.50 lakh per month? Know how much you have to invest

Nivesh ka tarika | SIP in Mutual Funds : Want to earn more than Rs 1.50 lakh per month? Know how much you have to invest, want to earn more than Rs 1.50 lakh per month? Know how much you have to invest

SIP in Mutual Funds : Want to earn more than Rs 1.50 lakh per month?  Know how much you have to invest

Become a millionaire by investing in mutual funds. (photo-istock)&nbsp

Headlines

  • Interest rates on savings schemes including fixed deposits, PPF have come down significantly.
  • Equity mutual funds give 10-12% annualized returns.
  • By doing SIP in equity mutual fund schemes every month, the income will increase significantly.

New Delhi: The interest rate on savings schemes has fallen to the lowest level ever. Doing your retirement planning using debt instruments like Fixed Deposit, Public Provident Fund (PPF), Post Office RD or EPF has become difficult as these investment products will not be able to help you beat inflation. Retail inflation has now risen to the level of 6%. In view of rising inflation, your investment is not giving more than 10% annual return. Such returns are possible only when you invest in shares or equity oriented products.

While it is a fact that share-oriented products like equity mutual funds are riskier than debt instruments, investment experts say that if you keep investing in such instruments for a long time (more than 10 years) The risk or volatility is significantly reduced and you will be able to beat inflation by getting 10-12% returns.

Currently, the average retired couple needs around Rs 50,000 per month to live a comfortable life after retirement, provided they have a house of their own. But if the annual inflation rate is assumed to be 5%, then after 20 years this required amount will increase to Rs 1.65 lakh. Also, this amount will increase every year after your retirement. Now the question arises that how much should be invested now to maintain such income after retirement?

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Use both SIP and SWP to achieve your goal

If your present age is 40 years and you are planning to retire at 60 years of age then you have 20 years to get this capital which can give you this income. Hence one can easily invest in Equity Mutual Funds. Assuming that your investment in equity mutual funds will yield an average return of 12%, you will need to invest Rs 40,434 in equity mutual fund schemes every month through SIP till the age of 60 to get a monthly income of Rs 1.65 lakh after retirement Need to. but how?

Your monthly SIP investment will increase to Rs 4 crore after 20 years at 12% return. Half of this, Rs 2 crore, and put that amount in a liquid fund or short term debt mutual fund and withdraw Rs 1.65 lakh every month through Systematic Withdrawal (SWP). In this case Rs 2 crore will last for about 10 years (9 years and 8 months), assuming you withdraw 5% more every year and your investment in liquid funds gives 4% annualized returns.

After 10 years, the remaining Rs 2 crore investment in equity mutual funds would have increased to Rs 6.52 crore and by that time (by the time you turn 70), your monthly expenses would have increased to Rs 2.70 lakh. Now withdraw this Rs 6.52 crore and follow the same process as 10 years ago. So, after 15 years (by the time you turn 85), the amount lying in your liquid fund will drop to Rs 2.33 crore. This amount can provide you income for the next five years of retirement life.

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If you follow this process, you will be able to beat inflation even if you assume a life expectancy of 90 years.

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