How can people build ₹5-6 crore corpus for retirement if they begin investing at 40
As the popular adage goes, “it’s never too late to start.” This phrase holds particularly true when it comes to planning for retirement. While it’s ideal to start saving and investing for retirement from an early age, many people may not have the financial means or foresight to do so. However, this doesn’t mean that those who start investing at 40 are doomed to a meager retirement. With a solid plan and consistent investment, it’s possible to build a substantial corpus for retirement, even if you’re starting late.
According to a report by NDTV Profit, a person aged 40 can build a retirement corpus of ₹5-6 crore by investing in a systematic investment plan (SIP) with a 12% expected rate of return. But how much do you need to invest each month to achieve this goal? Let’s break it down.
To build a retirement corpus of ₹5 crore, a person would need to invest approximately ₹55,000 in a monthly SIP for 20 years, assuming a 12% expected rate of return. This translates to a significant amount of money, but it’s achievable if you’re consistent and disciplined in your investment approach.
On the other hand, if you’re aiming to build a retirement corpus of ₹6 crore, you would need to invest around ₹65,000 in a monthly SIP at the same 12% expected rate of return. This is a more aggressive investment plan, but it’s still possible if you’re willing to commit to it.
It’s worth noting that these calculations are based on certain assumptions, including the expected rate of return and the time horizon of 20 years. However, the key takeaway is that it’s possible to build a substantial retirement corpus, even if you’re starting at 40.
So, how can you get started on building your retirement corpus? Here are a few tips to keep in mind:
- Start early: While it’s never too late to start, the earlier you begin investing, the more time your money has to grow. Even if you can’t invest a large amount, starting early can make a significant difference in the long run.
- Be consistent: Consistency is key when it comes to investing. Try to invest the same amount of money at the same time every month, and avoid withdrawing from your investments unless absolutely necessary.
- Diversify your portfolio: Don’t put all your eggs in one basket. Diversify your investment portfolio by investing in a mix of assets, such as stocks, bonds, and mutual funds.
- Monitor and adjust: Keep track of your investments and adjust your portfolio as needed. This may involve rebalancing your portfolio or switching to a different investment strategy.
- Seek professional advice: If you’re new to investing or unsure about how to get started, consider seeking advice from a financial advisor. They can help you create a personalized investment plan tailored to your needs and goals.
In conclusion, building a retirement corpus of ₹5-6 crore is achievable, even if you’re starting at 40. By investing consistently and wisely, you can create a substantial nest egg that will support you in your golden years. Remember to start early, be consistent, diversify your portfolio, monitor and adjust, and seek professional advice if needed.
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