If investment is planned in the right way at the right time, then your retirement can be cut in a better way. There are a few things to keep in mind while planning.
Financial Planning: Financial planning is very important for the employed people in today’s era. If investment is planned in the right way at the right time, then your retirement can be cut in a better way. Planning properly means investing your money in the right options, as well as keeping inflation in mind when aiming to raise funds for the future. Today the way inflation is increasing every year, it is necessary that investors must invest some of their savings where there is scope for higher returns than fixed income options. For this, equity funds can be a better option than equity.
Inflation at the rate of 6 percent every year
AK Nigam, director, BPN Fincap, says that for the last few years, the inflation rate has been around the average 6 per cent per annum. If inflation continues to increase at the same rate for the next 20 years, then today’s value of Rs 50,000 will be equal to Rs 1.5 lakh. That is, if today your work is done at an expenditure of 50 thousand rupees in a month, then after 20 years you will have to spend 1.5 lakh rupees on the same work. Therefore, whenever you plan after 20 years, make a plan by looking at the present 50 thousand equal to 1.5 lakh then.
He says that many people rely on small savings for investment. But right now the interest rates are very low. If you look at the returns by adjusting inflation, then the actual return in small savings or fixed income options will not be even 50 percent. Hence options with high returns are necessary. In these, mutual funds can be better for the long term. If you are planning for retirement, then do SIP or Systematic Investment plan for the next 20 years, after that choose the option of SWP i.e. Systematic Withdrawal Plan.
SIP today SWP tomorrow
If SIP is taken today with the option of SWP tomorrow and planning for 20 years later, then SIP will have to be done for the first 20 years. SWP option for 20 years after that. If you need Rs 1.5 lakh after 20 years for next 20 years then…..
Calculator: 20 Years SIP
Monthly SIP: 20 thousand rupees
Duration: 20 years
Estimated Return: 12% p.a.
Value of SIP after 20 years: Rs 2 crore
Calculator: Next 20 Years SWP
Investment: 2 crores
Estimated Annual Return: 8.5%
Annual Return: Rs 8.5 lakh
Monthly Return: Rs 17 lakh/12 = Rs 146166
What is SWP
SWP is regular withdrawal. Through this the units are redeemed from the scheme. On the other hand, if there is surplus money after the stipulated time, then you get it. Through this, investors get back a fixed amount from the mutual fund scheme. Investors themselves choose the option of how much money to withdraw in how much time. This money can be withdrawn on daily, weekly, monthly, quarterly, 6 months or yearly basis.
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