Monthly savings of 5000 rupees, got 13 crores in 28 years, did you also think of something like this for retirement

Retirement With Mutual Funds : If your retirement is after 25 or 30 years from today, then you would want to have a sufficient corpus at that time, so that life after retirement can be spent comfortably. Imagine how much better your life after retirement will be if you get a fund of 12 crores or 13 crores on retirement by saving 5000 rupees every month in a disciplined manner. Now you must be wondering in which scheme or where can you invest to get such profit. This has been made possible in Equity Linked Savings Scheme i.e. ELSS. ELSS has a lock-in period of 3 years, that is, it cannot be redeemed before 36 months.

Actually, retirement planning is a major financial goal. If it is done correctly, then your life after retirement can become golden years. For this, the tax saver scheme of mutual funds ELSS can be a better option. Most mutual fund houses issue ELSS schemes. These equity mutual fund schemes also work like other equity mutual fund schemes, in which there is a facility to invest through lump sum and SIP. Examples of returns are given below.

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HDFC ELSS Tax Saver Fund

This fund has SIP data of 28 years. According to which, the value of Rs 5000 monthly SIP has become more than Rs 13 crore in 28 years.

Monthly SIP: Rs 5000
Tenure : 28 years
Annualized Return: 23.12%
Investment in 28 years: Rs 17.80 lakh
Value of SIP after 28 years: Rs 13,19,37,238 (Rs 13.19 crore)

ICICI Prudential ELSS Tax Saver

This fund has SIP data of 24 years. According to which, the value of Rs 5000 monthly SIP has increased to more than Rs 2.78 crore in 24 years.

Monthly SIP: Rs 5000
Duration : 24 years
Annualized Return: 18.8%
Investment in 28 years: Rs 15.40 lakh
Value of SIP after 28 years: Rs 2,77,72,430 (Rs 2.78 crore)

(Source: Value Research)

Amazing scheme: This mutual fund made Rs 3000 SIP into Rs 9.5 crore, track record of 23% CAGR in 28 years

ELSS: High returns with tax saving

Equity Linked Savings Scheme (ELSS) not only provides tax savings, but also increases your wealth rapidly in the long term. This is a tax saver mutual fund, which is linked to equity. That is, a large part of your investment is invested in equity schemes. At the same time, some exposure is also in fixed income, through which your portfolio gets diversified. In this category of mutual funds, tax exemption is available on investment up to Rs 1.50 lakh under section 80C of the IT Act. However, due to being market linked, there is some risk in it compared to small savings like FD or NSC. But in this, you can choose a safe way of investing through SIP.

Tax rules

Long term capital gains are applicable in ELSS, but income up to Rs 1 lakh is tax free. Whereas, the entire income from the fixed income options which are exempted under 80C is taxable. However, it is not necessary to withdraw money after lock in. If you are making profit, you can hold it as long as you want. You can start SIP in this scheme whenever you have money. Here we have given information about 5 ELSS schemes that give top returns in 5 years.

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SIP and SIP top up facility

While investing in ELSS, you can opt for a Systematic Investment Plan (SIP). The biggest advantage of this is that you do not have to rush last minute to invest in any tax saving product just to save tax. Investing through SIP throughout the year has the advantage of averaging, you get better risk adjusted returns over time.

By investing in ELSS, you also have the option to increase your investment whenever required. You can start a SIP with a regular amount that you need for tax savings. You can increase your contribution as your income increases or if you find any shortfall in the maximum limit of Rs 1.5 lakh under Section 80C.