How can people build ₹5-6 crore corpus for retirement if they begin investing at 40
As the saying goes, “it’s never too late to start,” and when it comes to investing for retirement, this couldn’t be more true. While it’s ideal to start saving and investing for retirement from an early age, many people may not have the means or the foresight to do so. However, if you’re 40 years old and just starting to think about your retirement, there’s still hope. With a solid investment plan and discipline, you can build a substantial retirement corpus, even if you’re starting from scratch.
Considering the retirement age to be 60, a person aged 40 has 20 years to accumulate a sizable retirement corpus. According to a report by NDTV Profit, if you want to build a retirement corpus of ₹5 crore, you would need to invest ₹55,000 in a monthly Systematic Investment Plan (SIP) for 20 years, assuming an expected rate of return of 12%. This may seem like a daunting task, but it’s achievable if you’re committed to your investment plan.
To break it down further, let’s consider the power of compounding. When you invest in a SIP, your money grows exponentially over time, thanks to the magic of compounding. Even if you start with a modest investment amount, the power of compounding can help your wealth grow significantly over the years. In this case, investing ₹55,000 per month for 20 years can result in a corpus of ₹5 crore, which is a substantial amount to support your retirement goals.
If you’re aiming for an even bigger retirement corpus, such as ₹6 crore, you would need to invest ₹65,000 monthly in a SIP at 12% return. This may require some adjustments to your budget and spending habits, but the end result can be well worth the effort. Having a larger retirement corpus can provide you with greater financial security and flexibility in your golden years, allowing you to pursue your passions and interests without worrying about money.
So, how can you get started on building your retirement corpus? Here are some steps to consider:
- Start with a solid investment plan: Determine your retirement goals and risk tolerance, and create a personalized investment plan that aligns with your objectives.
- Choose the right investment options: Consider investing in a mix of low-risk and high-risk assets, such as debt funds, equity funds, and hybrid funds, to balance your portfolio and optimize returns.
- Be consistent with your SIP investments: Set up a monthly SIP and stick to it, even during market downturns, to benefit from the power of compounding and dollar-cost averaging.
- Monitor and adjust your portfolio: Periodically review your investment portfolio and rebalance it as needed to ensure that it remains aligned with your retirement goals and risk tolerance.
- Avoid unnecessary expenses and debt: Keep your expenses in check and avoid taking on high-interest debt, which can derail your investment plans and undermine your financial security.
In conclusion, building a retirement corpus of ₹5-6 crore is achievable, even if you’re starting from scratch at 40. By creating a solid investment plan, choosing the right investment options, and being consistent with your SIP investments, you can accumulate a substantial retirement corpus over the next 20 years. Remember to stay disciplined, patient, and informed, and you’ll be well on your way to securing a comfortable and fulfilling retirement.
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