3 rupees today, 52.24 lakh rupees tomorrow: How much do you need to invest today to get a corpus of 3 crore in 30 years?
Retirement Plan: The retirement corpus can make your retirement phase smoother. Making money for monthly expenses at retirement may be necessary and a luxury. But what if you think this can be achieved with a corpus of Rs 3 crore? Think twice! If you are 30 years old this year, is your corpus of Rs 3 lakh in 30 years sufficient? Your funds lose value due to inflation. Therefore, the price of Rs 3 crore today will equal Rs 52.5 crore in 30 years, with an inflation rate of 6%. In this case, how much corpus do you actually need equals Rs 3 crore today for 30 years, and how much should your one-time payment, annual and monthly SIP investment be? See examples!
How inflation affects your income
Suppose you buy something for Rs 1,000 today.
At 6% inflation, the same thing is priced at Rs 1,060.
Things apply to your income, too.
If you earn Rs 50,000 today with an inflation rate of 6%, you will need to earn Rs 53,000 to meet inflation.
What is the future value of the corpus?
Suppose you think the retirement corpus of Rs 3 crore is enough for you. Let’s look at the table to see how the value of Rs 3,00,000 is reduced year by year with an inflation rate of 6%.
In the table, you can see that the estimated estimated Rs 3 crore will be reduced to Rs 1,67,51,843.31 in 10 years; it will be Rs 93,54,141.81 in 20 years; it will be Rs 52,23,303.93 in 30 years.
How much do you actually need?
If the estimated inflation rate is 6%, that’s how much additional corpus is needed over the past 30 years.
Now you can see that the inflation-adjusted Rs 3 crore will be worth Rs 5,3,725,430.90 in 10 years.
In 20 years, the value will be Rs 9,62,14,064.17, while in 30 years, it will be Rs 17,23,04,735.19.
This means you will need an estimated corpus larger than this, rather than a corpus of Rs 3 crore.
The investment amount achieves this goal
Suppose you choose a one-time payment, annual SIP investment and monthly SIP investment model at an annual rate of 12% per year at Rs 17,23,04,735.19; here is the estimated amount you need:
One-time investment
The estimated one-time investment will be Rs 1,78,62,274.51.
Annual SIP Investment
It is estimated that the same investment in SIP investment will be Rs 6,37,474.84 per year.
Monthly SIP investment
An estimated monthly SIP investment to achieve the same retirement target will be Rs 55,925.42.
17,23,04,735.19 What does corpus mean?
Let’s understand it from the current perspective. If you invest your Rs 3 crore investment in a mutual fund with 7% of your annual earnings, you can withdraw your estimated monthly income of Rs 1,98,000 over 30 years.
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
