SIP Calculator: Vijay Kumar Veeranve is a 45 year old professional whose monthly income is in 6 digits. Early in his career, Ravi had to take care of his widowed mother and an unmarried sister. Hence, Vijay could not save for his long term financial goals. Now, she is free from all family responsibilities as her children are now well settled and her home loan was also closed last month. Now, he is looking to invest for his post-retirement needs. According to Ravi he will need around ₹5 crores to meet your financial requirements after retirement. Therefore, Vijay is on the lookout for an investment tool that will enable him to make ₹5 crore in 15 years.
Batting in favor of mutual fund investments; Pankaj Mathpal, MD & CEO, Optima Money Managers, said, “The investor not only needs to beat inflation but also ensure that he does not miss out on his investment target as he will retire at maturity. So, my advice to the investor is to go for equity mutual funds in SIP mode. This will help them to get around 12 to 14 per cent return on one’s investment for a long period of 15 years.”
Pankaj Mathpal of Optima Money Managers further said that one should increase one’s monthly SIP with the increase in one’s income. Hence, one must follow the step-up SIP mode as it helps an investor to bring down their monthly SIP to the lowest possible level.
How many annual steps will be enough to meet Vijay ₹5 crore target; Kartik Jhaveri, investment director at Transcend Capital, said, “Generally, an investor is advised that the annual step-up is 10 per cent. But, in this case, I suggest the investor to go for a 15 per cent annual step-up. Would suggest as he is free from all family responsibilities and is able to earn in 6 digits. Hence, he should maximize his present financial position by keeping the annual step-up at 15 per cent.”
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Assuming that an individual returns 12 per cent on monthly SIP for 15 years keeping the annual step-up at 15 per cent, the SIP return calculator shows that the winnings would be required ₹44,000 to start your investment. At the end of 15 years, he will get ₹5,00,39,132 or around ₹5 crore as maturity amount, which is exactly what Vijay wants at the time of his retirement.
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However, in case the interest rate of the mutual fund falls in the upper part of 14 per cent, in that case the mutual fund return calculator shows that Vijay will get. ₹5.69 crore maturity amount.
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Therefore, ₹44,000 monthly SIP is what Vijay needs to start investing today ₹5 crore fund after 15 years.
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