Business News Desk, Everyone does retirement planning, but those who are smart make such plans that the mind of the common man gets confused. Just imagine that you retire at the age of 50 and still get a pension of Rs 1 lakh every month. Not only this, despite withdrawing money from the account every month, your corpus will keep increasing instead of decreasing. Now after hearing this, you must be thinking that this is a scheme of the rich. Of course, rich people adopt this formula, but you can take advantage of it by investing only Rs 15 thousand every month.
This will be possible with Systematic Withdrawal Plan
Systematic Withdrawal Plan (SWP) is a facility through which you can withdraw money regularly from your mutual fund investment. SWP gives you regular income, i.e. money. If you invest in mutual funds with a little planning, you can retire early and then live your entire life comfortably while earning a hefty pension.
Understand its complete mathematics
Let us assume that you start investing 15 thousand rupees every month in mutual funds from the age of 25. Mutual funds give an average return of 12-13 percent, but we believe that we will definitely get an average return of only 10 percent. In this way, in 25 years you will invest a total of 45 lakh rupees, on which you will get an interest of Rs 1.55 lakh. In this way, you will have a corpus of about 2 crore rupees by the age of 50. If you do not withdraw this money till the age of 60 and continue to invest 15 thousand rupees every month, then by the age of 60, i.e. in the next 10 years, this corpus will become almost three times to 5.74 crore rupees. On the other hand, if you want, you can retire at the age of 50 and start taking a pension of Rs 1 lakh every month. Now you will feel that in this way the money in the account will start decreasing, but this is not the case at all. In fact, instead of your money decreasing, it will keep increasing during this period. If you withdraw Rs 1 lakh every month from the age of 50, then in the next 20 years i.e. till the age of 60, you will withdraw about Rs 2.40 crore. You will get interest of about Rs 7.4 crore on your investment. Now when you check your account after 20 years, you will know that the money in it has increased instead of decreasing and has become about Rs 7 crore.
Adjust for inflation as well
The calculation you have understood now is in normal conditions. However, inflation also increases every year. Let us assume that inflation will continue to increase at the rate of 5 percent annually. In such a situation, if you take a pension of 1 lakh every month, then you will withdraw about Rs 4.12 crore in 20 years. At the same time, you will get a total interest of about Rs 5.60 crore on your investment. When you check your balance after 20 years, then even at that time about Rs 3.5 crore will remain in your account.
How will the money increase despite withdrawal?
Most people are confused about why money keeps increasing instead of decreasing despite withdrawing it from the account. Actually, the money you are withdrawing is almost half of the interest you get on your total corpus. That is, half the interest is still getting added to your corpus and in the coming years, you are getting interest i.e. return on that too. This is the reason why your money keeps increasing instead of decreasing.
Step up SIP will be more beneficial
Now if you are a little more smart, then instead of normal SIP, do step up SIP. Under this, you keep increasing your investment by 10 percent every year. In such a situation, where earlier you were able to create a corpus of 2 crores in 25 years by investing 15 thousand rupees every month, now you will have a corpus of about 5 crores by the age of 50. In such a situation, if you want, you can increase your pension or you can also increase it a little every month.
