Maximizing the potential of mutual funds SIP calls for starting the investing process early in life and continuing it for an extended period of time. Particularly when saving for retirement, getting a head start can be quite beneficial to your corpus. Nevertheless, let’s first grasp what a SIP is and how it operates before you can calculate the benefits of saving for retirement.
Systematic Investing Plan: What Is It?
Investors can make frequent, little or fairly big investments through Systematic Investment Plans (SIPs), a type of investment vehicle made available to them by many mutual funds. Investments are typically made weekly, monthly, or quarterly.
How does SIP function?
Fixed investments are made at predetermined periods as part of the SIP. Using this, a trader can make investments without hassle or market timing.
For instance, if a person invested Rs 8416 per month starting at age 20 and received a 12% return, they would have Rs 10 crore when they retired at age 60. The SIP amount would increase with age in order to reach the Rs. 10 crore goal. In order to acquire Rs. 10 crores at retirement, for instance, if you start saving at age 25, you would need a SIP of Rs. 15,396.
When you retire, you will have a range of options for using the retirement corpus to produce a monthly income flow for your needs. The money can be kept in a bank FD or purchased as an annuity from life insurance companies, such as the LIC New Jeevan Shanti Plan.
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