How to build your retirement corpus

Still reeling at the number of zeros you've found in your retirement goal? Don't get your heart rate up. While the corpus you're targeting may seem daunting today, it is well within reach with some disciplined investing. Here's a five-step recipe to building the corpus you need. Start young It may be a little odd to start thinking about hanging up your boots when you are just putting them on for your first job. But an early start makes the difference between sprinting towards your target like Hima Das and huffing and puffing towards it like an octogenarian. Let's see how much a 25 year-old (let's call her Alyssa) will need to invest at different points in her life if she wants to get to the retirement kitty of Rs 12.5 crore. If she starts off immediately at 25, she has 35 years to go to retirement and a monthly SIP of about Rs 22,690 in an equity fund earning 12 per cent will get her to her goal. But if she waits until 35, the SIP amount she needs shoots up to Rs 73,430 at the same 12 per cent return to get her to it. This demonstrates that starting early is the single most important thing you can do to scale the Mount Everest that is your retirement goal. Step up What if the Rs 22,690 monthly savings we mentioned is a tall order for Alyssa to save in her initial working years? That problem is quite easily solved by starting off with an affordable number and stepping up one's SIPs as one's career takes off. If Alyssa starts with a Rs 10,000 SIP in her fir

This article was originally published on February 02, 2021.