Smart SIP Investment: If you’re aiming to retire early with a comfortable pension, you can create a ₹5 crore corpus using the ‘Triple 5’ formula for SIP investments.
This strategy focuses on retiring 5 years earlier and increasing your SIP by 5% each year. The power of compounding plays a crucial role in growing your investments over time.
Not only will you accumulate a large corpus, but after retirement, you could also arrange a monthly pension of ₹2.6 lakh. Here’s how this Triple-5 SIP formula works.
How the Triple-5 Formula Works:
Start Early
Starting your retirement planning early lets you fully benefit from compounding. For example, starting a SIP at the age of 25 can help you accumulate a substantial corpus quickly.Retire 5 Years Earlier
The first “5” in Triple-5 means retiring 5 years earlier. With early planning, you can reach a ₹5 crore corpus by the age of 55, instead of waiting until 60.Increase SIP by 5% Annually
Each year, increase your SIP amount by 5%. This gradual increase boosts your investment over time, leveraging the power of compounding to grow your wealth faster.Achieving the ₹5 Crore Target
By continuing to increase your SIP by 5% every year, you can accumulate a ₹5 crore corpus by 55, eliminating retirement worries.How to Reach ₹5 Crore
For example, if you start with a SIP of ₹1,000 and increase it by 5% every year, with an 11% return rate, you could accumulate ₹5.20 crore over 30 years.Post-Retirement Pension
After retirement, with ₹5.20 crore invested in a Fixed Deposit at 6% interest, you can receive ₹31.20 lakh annually, which translates to a monthly pension of about ₹2.6 lakh.
