At the age of 30, your biggest asset is time. Suppose, you started investing from the age of 25-28 and continued till the age of 60. This long period of 30-35 years can increase your money many times. This is called the power of compounding, where not only the principal amount but also the interest is earned. The longer the time, the bigger the profit. How much money should you save? If your goal is to save at least Rs 1 crore by the age of 60, then you do not need a very large amount.
For example, if you do SIP of about Rs 6,000 to 7,000 per month in equity-based mutual funds from the age of 30 and get an average return of 12 percent per annum, then at the age of 60, your fund can be close to Rs 1 crore. And if the time or investment amount can be increased a little, then this amount can be even more. Where to invest? It is not right to rely only on savings accounts or FDs for retirement. Because the money kept there gradually loses its value due to inflation.
According to experts, equity mutual funds, index funds and retirement funds are good options for meeting long-term goals. It is wise to gradually shift towards safe options by reducing the amount of risk as you get older. Why is SIP the easiest way? SIP or Systematic Investment Plan is the easiest and most convenient method of retirement planning. In this, a fixed amount is invested every month.
As a result, there is no big pressure at once and the impact of market fluctuations is also relatively less. By doing SIP regularly in the long term, a large fund is gradually created. Important thing to remember While planning for retirement, one must keep inflation in mind. The value of 1 crore rupees today can decrease a lot after 30 years. So review your investments from time to time and increase the SIP amount if necessary. The earlier you start, the easier it will be to build future financial security.
Related Stories
Business
Business
Education
Education
