New Delhi:- Retirement is an important for everyone. This is the time when someone needs regular income for their daily expenses, but does not have the source of earning income. In such a situation, the return from their investment can be useful. They can invest monthly, or lump sum in their working years and allow this fund to grow for their retirement years.
Learn how the investment increases in the long term, how the power of compound plays an important role in creating a large retirement fund, and how a lump sum investment of Rs 5,00,000 and a person from SWP can have a monthly income of Rs 87,000 for 30 years.
A lump sum investment of Rs 5,00,000 to Rs 87,000 monthly income for 30 years
Today we will know how a lump sum investment of Rs 5,00,000 can increase in 30 years and how a person can withdraw Rs 87,000 per month for 30 years.
Retirement fund in 30 years due to lump sum investment of Rs 5,00,000
Here we are taking the example of a 25 -year -old investor, who invests a lump sum of Rs 5,00,000. The investor gets 12 per cent annual return on his investment and allows the fund to grow for 30 years. The estimated capital gains in 30 years will be Rs 1,44,79,961, while the estimated retirement fund will be Rs 1,49,79,961.
The investor will have this fund at the age of 55 years.
Income tax on retirement corpus
The current tax will be Rs 17,94,370.125 at Rs 1,49,79,961, according to the current 12.5 per cent long -term capital profit tax rate of 12.5 per cent.
After paying the tax, the estimated remaining retirement corpus will be Rs 1,31,85,590.875. This will be an estimated corpus for SWP investment.
How does Swp investment works
In SWP investment, you invest in a lump sum amount in mutual funds and ask the fund house to pay you a fixed amount every month. Fund house sells the same amount of net asset value unit from your investment for this. But at the same time your investment also increases.
So if your withdrawal rate is lower than the rate growth rate, then your retirement fund will not end, and you can withdraw the amount from it forever.
How to get a monthly income of Rs 87,000 for 30 years
The investor who is currently 55 years old can invest his deposit in conservative mutual funds, where he gets an annual growth rate of 7 percent. At this growth rate, an amount of Rs 1,31,85,590.875 can give a monthly income of Rs 87,000 for 30 years. This means that the investor can get 87,000 rupees every month by the age of 85.
The total withdrawal amount will be Rs 3,13,20,000 in 30 years, while the remaining amount will be Rs 2,64,203.
