I am 25 and want to invest for my retirement. I am planning to invest Rs 5,000 through SIPs and am planning to increase the investment by 10 per cent every year. Please let me know how much of corpus can I accumulate in next 30 years.
Santosh Marwah, Bhopal
It is commendable that at 25 you are considering to start saving for your retirement which is another 35 years to go. If you invest just Rs 5,000 for the next 35 years in a portfolio that earns and annualised 12 per cent you can achieve a corpus of Rs 3.24 crore for your retirement. The same corpus swells to Rs 7.42 crore if the portfolio earns at 15 per cent. This is the combined impact of power of compounding and systematic investments.
Your approach of increasing your contribution towards retirement savings by 10 per cent each passing year is a good strategy to further enhance your retirement savings. The provision of SIP booster is offered these days by several AMCs, which you could opt for depending on the fund that you invest in. Considering the time frame that you have in mind, you should definitely track the performance of the fund that you invest in at least once a year to check its performance compared to the benchmark and its peers. This way, you will also know how your investment is progressing towards your retirement goal. Funds from the Outlook Money Stellar List like Franklin India High Growth or SBI Magnum Multicap and ICICI Pru Focused Bluechip are good to invest in.
