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How should a 20-year-old start SIP in mutual funds for retirement planning?

Ashutosh Gupta explains how to plan for retirement at an early age

I am 20 years old and want to start SIP in mutual funds for my retirement planning. How should I proceed with a 40-year investment plan?
- Srijan Singh

You should not worry too much about getting a perfect plan right now. What is critical at this stage is to get started. So I'd suggest, if you are a taxpayer at this point, look at one or two good ELSS funds (equity linked savings schemes) or the tax-saver funds as they are known and start an SIP in them. If you are not a taxpayer, start an SIP in a couple of good aggressive hybrid funds.

At this stage, it's important to remain disciplined and continue with your SIP through the ups and downs of the market. It is likely that the returns may not match your expectations right at the start in these initial years, but that should not act as a deterrent, and you should stay the course. Increase your SIP amount with an increase in your income over the years. Further, leave the job of doing more nuanced goal-based planning for two to three years down the line. Do that once you've got a first-hand experience of equity investing and start appreciating how equity markets work.

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