Mutual Fund Calculator : SIP's that can help you get ₹ 1 lakh pension Per Month

Mutual Fund Calculator : SIP's that can help you get ₹ 1 lakh pension Per Month

Mutual Funds investment can be used for post-retirement income as well. According to tax & investment experts, Mutual Fund SIP (Systematic Investment Plan) enables an investor to grow money for one’s post-retirement financial needs. However, if an investor uses this money wisely, it will help the investor continue earning post-retirement.

They say that like SIP, one needs to invest the mutual fund maturity amount in SWP (Systematic Withdrawal Plan) to continue earning on monthly basis.

On how to plan one’s monthly income post-retirement, “One needs to first ensure how much monthly income one would require to continue meeting one’s financial goals.

After that, there is need to assess how much amount one would need for SWP after retirement. Once, these two goals are finalised then comes how much monthly SIP will be needed to meet that post-retirement monthly income goal.”

Money required for SWP to earn ₹ 1 lakh monthly income for next 25 years, “One would need ₹ 1.35 crore amount for SWP to get ₹ 1 lakh monthly income post-retirement for next 25 years. Assuming 8% return on one’s money in SWP, the investor will continue to earn ₹ 1 lakh per month for next 25 years.”

However, that sometimes people want to retire little earlier and in that case one needs post-retirement income for longer period. If a person wants to retire at 55 years of age, then it would need ₹ 1 lakh monthly income for next 30 years. In that case, one’s SWP amount will go up to ₹ 1.43 crore.

On how to get ₹ 1 lakh income for next 30 years post-retirement, “Without assuming inflation post-retirement, an investor can start an SIP of ₹ 2,100 per month & increase the amount of SIP by 15% year after year. Assuming CAGR of 12% on investment, you will be able to accumulate around ₹ 1.43 crore.

If you invest the Corpus in SWP at 8% per annum, you will be able to withdraw ₹ 1 lakh per month for next 30 years.”

Mutual Fund schemes in which one can think of investing today are ICICI Prudential Focused Equity Fund, ABSL Equity Advantage Fund, Axis Midcap Fund, Nippon Small Cap Fund & ICICI Prudential Global Advantage Fund.

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