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Retirement Planning: If one has had an eventful youth, they will prefer having the same or a better lifestyle at their retirement stage.
A situation where they have the financial freedom to live life their own way.
Where their dependency is not on anyone but themselves.
Such a retirement life is possible only if one has planned their retirement properly.
When they have generated income resources or have made investments, returns from which can help them sustain post their retirement.
If one wants to create such a corpus from investments, they may opt for a monthly investment.
They can also invest when they have a surplus.
Or, they can make a one-time investment early in their life and let the corpus grow to reap benefits in their old age.
In either way, they can create a sizeable corpus if they have invested for a long time.
But what’s the importance of a retirement corpus?
Why should one build it?
What are important factors to keep in mind while creating a corpus?
And in how many years can one create a retirement corpus of nearly Rs 1,59,00,000 from a one-time investment of Rs 3,00,000.
Importance of retirement corpus
A retirement corpus is necessary for anyone seeking a retirement full of financial freedom. If one has created passive income resources that can cover their lifelong expenses, they can retire any time.
Why should one build retirement corpus?
One should build it to achieve self-dependency in a stage of life where their other income sources may dry out. In such a situation, the retirement corpus may be their only source of income.
What is ideal retirement age?
There is no ideal age for retirement. One should preferably have it early in their life. For that, they can start investing early for their retirement.
Power of compounding in retirement planning
The early starter gets more years for compound growth of their retirement corpus compared to a person who begins late. Let’s see it with a couple of examples.
From Rs 2,00,000 one-time investment to Rs 1.87 cr corpus
A Rs 2 lakh one-time investment can generate an estimated Rs 1.87 crore corpus at 12 per cent annualised growth in 40 years.
So if a person is 20 years old, invests Rs 2 lakh, and lets their corpus grow, they can create a large corpus by 60.
From Rs 3,000 monthly SIP investment to Rs 2.08 crore corpus
One invests Rs 3,000 a month through an SIP and gets a 12 per cent annualised return on that; they can create an estimated corpus of Rs 2,08,19,555 in 37 years.
The reason is that long years of compounding help the corpus grow faster.
From Rs 3,00,000 investment to Rs 1,59,00,000 retirement corpus
We will show how a Rs 3,00,000 one-time investment will grow to an estimated retirement corpus of nearly Rs 1,59,00,000 in different phases.
Retirement corpus from Rs 3,00,000 one-time investment in 10 years
In 10 years, estimated capital gains will be Rs 631,754, and the estimated corpus will be Rs 931,754.
Retirement corpus from Rs 3,00,000 one-time investment in 20 years
In 20 years, estimated capital gains will be Rs 25,93,888, and the estimated corpus will be Rs 28,93,888.
Retirement corpus from Rs 3,00,000 one-time investment in 30 years
In 30 years, estimated capital gains will be Rs 86,87,977, and the estimated corpus will be Rs 89,87,977.
Retirement corpus from Rs 3,00,000 one-time investment in 35 years
In 35 years, estimated capital gains will be Rs 89,87,977, and the estimated corpus will be Rs 1,58,39,886.
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