Retirement Planning Tips: You can earn Rs 2 crore by investing Rs 5 lakh, you will get around Rs 2 lakh every month, know how?

Retirement Planning Tips: Retirement planning is not just about saving. It’s about preparing from today, so that you can live comfortably even after leaving your job. You have to build a fund that will cover your expenses for many years, while inflation gradually makes everything more expensive. Yet, around age 30, people often say, “There’s still a lot of time.” It is common to think this, but this delay is costly in the long run.

Why is it important to start early

If you start late, you have to face two difficulties. First, inflation pushes your retirement target higher every year. Secondly, due to less time, the benefits of compounding are reduced, and then you have to invest more money for the same goal. Starting early doesn’t have to mean any major sacrifice. This means giving time to your money so that it works for you in the long run. Let us understand this with an easy example.

Travel from 5 lakh to 1.5 crore

Suppose you are 30 years old and want to retire at the age of 60. This means you have 30 years. Suppose you want income for at least 10 years after retirement. If you invest Rs 5 lakh in a lump sum in a mutual fund today and earn an average annual compound return of 12%, then this amount can be around Rs 1,49,79,961 (approximately Rs 1.50 crore) after 30 years. This means that just Rs 5 lakh can turn into a huge retirement fund over time.

How will the income be generated from this fund?

After retirement, goals change. Stable income is more important than growth. One way is to shift the fund to a conservative hybrid mutual fund. This investment is mostly in debt and a little part in equity, hence the risk is considered low. After this, a Systematic Withdrawal Plan (SWP) can be initiated. In this, you withdraw a fixed amount every month and the remaining money remains invested.

How much money will you get for 10 years?

Suppose after retirement you earn 8% annual return for the next 10 years and withdraw Rs 1.75 lakh every month. 10 years = 120 months. Total Withdrawal: 1.75 lakh × 120 = 2.10 crore. If the corpus of Rs 1.50 crore grows at the rate of 8% during this period, then it can generate additional income of about Rs 70.66 lakh. This means that the total potential value is approximately ₹2.21 crore. Your total withdrawal is ₹2.10 crore. This model works like this.

real power of time

This is not a magic formula. Time makes the real difference. By starting early you get the full benefit of compounding. Starting late requires a much higher investment to achieve the same goal, especially when inflation continues to increase costs.

These figures are for example only. In real life, you need to consider your retirement age, expenses, inflation, risk appetite, potential returns and how many years of income you need after retirement. But one thing is clear, the sooner you start, the less pressure you will feel later.