To get the most out of mutual fund SIP, you need to start investing early and stick with it for a long time. When it comes to saving for retirement, getting started early can do wonders for your wealth. But first, let’s talk about SIP and how it works so you can understand the calculations on how saving for retirement can help you.
How does a systematic investment plan work?
A lot of mutual funds offer investors the Systematic Investment Plan (SIP), which allows them to make regular, small, or large investments. Investments are typically made weekly, monthly, or quarterly.
How does SIP function?
SIP works by investing consistently over predetermined time periods. An investor can invest without fuss or having to time the market with this.
For instance, assuming a return of 12 percent, a person would only need to invest Rs 8416 per month beginning at age 20 to receive Rs 10 crore upon retirement at age 60. The SIP amount required to reach the Rs 10 crore goal will increase with age. For instance, if you start investing at 25 years old, you’ll need a Rs SIP. 15,396 for Rs. 10 crores when you retire.
When you retire, you’ll have a lot of options for how to use your retirement fund to meet your needs on a monthly basis. You can either buy annuity plans from life insurance companies like the LIC New Jeevan Shanti Plan or store the money in a bank FD.
