Greeting To Our Readers! 

Retiring Early and starting their own startup (for some) is a dream for many, no doubt they are earning, saving, and investing to achieve their dream.

But the point to argue is how can one decide the right amount he needs to retire with and how to achieve that amount before their retirement age!

Retirement is basically a phase of life when you do not have a source for regular income, but your expenses continue in fact, expenses get increased. On Top of that, when you plan to retire early, you have less time and big corpus to create than a normal retirement planning.

Retirement planning not only includes creating a retirement corpus, but it includes planning that waives off all your loans or EMI debts that you have by the time you retire.

Overall an individual needs to plan his finances and investment in such a way that he accumulates the retirement money required plus, he also pays off all his loans and EMI debts by the time he desires to retire which is at the age of 50. Is this possible?

Well, let us see……

Count On Expenses After Retirement! 

To ensure that your golden years are just like you have imagined them to be, you will have a look at your expenses. Here are some tips that you must follow to count your expenses after your retirement.

Include your healthcare expenses with monthly expenses after retirement because with the growing age, the human tendency to fall ill or suffer other discomforts of aging is high. And if one falls ill frequently certainly the medical cost will also be high. That simply means you cannot ignore the medical cost.

Most retirees prefer exploring new places or traveling during retirement. When accumulating wealth, you will have to consider expenses related to hometown visits, traveling to new cities, visiting relatives, and so on.

Although a few responsibilities will take a backseat, household requirements are the thing from which you cannot wash your hands off. You will have to spend on daily groceries, water, electricity, household help, personal care, etc.

Do add lifestyle expenses like those for shopping and dine-outs. This is because maybe in your old age you would be less interested in shopping but as you are planning to retire early, means in early retirement days you would love to shop and dine out.

How To Accumulate Rs 5 Crores in 25 years! 

Understand it through an example. Pallav an IT professional has a dream to retire by the age of 45. He started working at the age of 23 and but now planning to start his investment when he turned 25.  

At present, Pallav’s monthly take-home salary is Rs 80,000. He wants to accumulate a retirement corpus of Rs 5 crore by the age of 50 from now. That means he must plan and invest to accumulate Rs 5 crores in the next 25 years.

Let us calculate how much SIP amount will be required to be invested by Pallav in equity mutual funds to accumulate the required retirement money. Here we will use a MUTUAL FUND SIP CALCULATOR to plan Pallav investment in mutual funds.

Assuming an interest rate of 12% per annum, Pallav will be required to invest around Rs 27000 per month in equity mutual funds for the next 25 years to create a corpus of Rs 5 crore as his retirement money.

Below is a picture depicting Pallav’s investment in mutual funds to create the retirement money required. Have a look!

#note: the return shown in the figure are calculated returns and not the actual. Actual returns may vary with volatility in the market. 

Let Us Sum Up! 

Accumulating corpus for your retirement days is important, and more important is to start investing for the same at the right time especially when you are planning to retire early.

Thus, if you are planning to retire early, I advise doing not to wait for a specific time, meet an advisor, and get your investment for retirement planned and executed in equity mutual funds today only!

Keep reading our article and stay updated with the latest news about Mutual Funds!

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).