The thought of retirement seems very basic when you’re in your 20s or 30s. But even though retirement may seem like a distant dream at present, your future self will surely thank you if you start now. What if we told you that putting in just ₹23,000 every month could turn into a corpus of ₹2.11 crore by the time you call it a career? Sounds too good to be true? It’s not! This post will tell you how.
Why You Should Care About Retirement Planning?
We all want our retirement to be as peaceful as possible. We wish to travel, spend time with family, and maybe finally do that thing that we always wanted to do. But the catch is that none of that is possible without financial freedom.
You can’t depend on fixed deposits or a pension from your employer. Today, it is upon you to design a comfortable retirement. It starts with investing in a solid retirement plan that will help you grow your savings over time.
The Power of ₹23,000 a Month Invested in the Right Retirement Plan
You may be thinking: “Why Rs. 23,000? And how does that turn into Rs. 2.11 crore?” Great questions.
We will assume you start investing Rs. 23,000 every month in a good long-term investment plan like a retirement plan, which gives an average annual return of 12%. Over 30 years, this amount could grow to around Rs. 2.11 crore.
Here’s how:
- Monthly Investment: ₹23,000
- Investment Tenure: 30 years
- Expected Annual Returns: 12%
- Final Corpus: ₹2.11 crore (approx.)
This isn’t magic; it’s the power of compounding. Your money is making money, and that money is making more money. It’s also known as the snowball effect, and it just keeps growing. If you want to see how much you will have to save and invest based on your retirement age, use a retirement calculator.
Is Investing ₹23,000 Every Month Possible?
Definitely! For most salaried individuals in their late 20s or early 30s, ₹23,000 a month is not out of the question.
Here are some tips to make it easy:
- Automate your investments: Set up Systematic Investment Plans that automatically deduct the money from your account. You won’t even notice the money is gone.
- Cut back on lifestyle inflation: That third streaming service? The fifth food delivery this week? Get rid of the extras.
- Increase your SIP with your income: Every time you get a raise, put 5 – 10% more in your SIP. That small step can add lakhs to your final Corpus.
Where to Invest the Money?
You have the will. You have the money. Now, which is the best place to put it? Here are some options we think you should look at:
- Retirement Plans and Mutual Funds: Systematic Investment Plans in diversified equity mutual funds are highly recommended for long-term growth. They are easy to get into, low on fees, and they’ve performed very well over the years.
- Public Provident Fund (PPF): While the returns are lower (around 7-8% at present), PPF gives you tax benefits and the support of the government, which makes it a solid and secure part of your investment portfolio.
- National Pension System (NPS): Built for retirement, NPS gives you market-related returns and tax savings under 80CCD. Also, it’s a great mix of equity and debt.
- EPF (Employees’ Provident Fund): If you are a salaried individual, your EPF is already a part of your retirement plan. Just see to it that you don’t touch it for short-term requirements!
The main thing is diversification; don’t put all your eggs in the same basket. A mix of aggressive and conservative investments will help you manage risk as well as grow your money.
Don’t Ignore Insurance
It’s tempting to focus only on wealth creation, but retirement plans work best when you pair them with smart protection.
- Health Insurance: A big medical bill can wipe out years of savings.
- Term Life Insurance: Ensures your loved ones are covered if something happens to you.
- Critical Illness Cover: Offers financial relief for major illnesses which can strike even before retirement.
Insurance is the safety net that will protect you from life’s uncertainties.
Final Thoughts: Future You Will Thank You
Retirement may seem like a distant dream today, but it’s a reality that comes faster than we think. Whether you’re 25 or 40, the best time to start building your corpus was yesterday. The second-best time? Right now.
A disciplined investment of ₹23,000 per month might feel like a pinch today, but it can offer you peace, freedom, and options tomorrow. You’re not just saving money, you’re buying time, independence, and happiness. So go ahead. Make the decision that your 60-year-old self will thank you for.