SIP+SWP: If you are working and have a salary in 6 digits, then life is going well. But when your working age is over, how will you manage your expenses? Have you ever planned with this in mind? Many people may answer that they have just started a job and have not thought much about retirement. This strategy is wrong and can increase tension during retirement or non-working days. Therefore, it is important that you start thinking about your future as soon as possible after earning starts. We will tell you through calculations how your alertness in working years can give you a tension-free life in old age. One solution to this is the combination of SIP and SWP.
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What is SIP first then SWP?
Retirement plan (Retirement Planning)If you are doing this, then first Systematic Investment Plan i.e. SIP and Systematic Withdrawal Plan on retirement i.e. SWP can help you better. The first phase is when you are in job and you can increase your wealth by investing a part of your earnings in better schemes. For this, mutual fund SIP is a better option. Investing in SIP also gives the benefit of compounding. By choosing the right schemes for SIP, a large fund can be created before retirement. There are many mutual fund schemes in which the long term return (SIP) is 15 to 18 percent per annum.
In the second phase, the option of Systematic Withdrawal Plan i.e. SWP (SWP Investment)Can choose. This is an effective way to get regular income in your hand. In SWP, you can choose the withdrawal amount and tenure as per your need. SWP is the best option for those investors who want to earn a fixed amount every month by investing once. In this, you keep getting the fixed amount at the fixed time i.e. every month, three months or throughout the year.
SIP Portfolio: Has the return of your SIP portfolio deteriorated? Take measures to avoid negative compounding
Investment planning for first 30 years
SIP every month: Rs 5,000
SIP Tenure: 30 years
Return estimate on SIP: 12 percent per annum
Total investment in 30 years: Rs 1800000
SIP value after 30 years: Rs 1,76,49569 (1.8 crore)
Here you get around Rs 1.80 crore if you do SIP continuously for 30 years. At retirement, you can keep Rs 50 lakh as a corpus and leave Rs 1.30 lakh for SWP for monthly income.
Monthly income planning for the next 30 years
SWP Period: 30 years
Investment in SWP: 1,30,00000
Return estimate on SWP: 10 percent
SWP amount every month: Rs 1,10,000
Total Value: Almost Nil
That means here you can withdraw around Rs 1.10 lakh every month for 30 years.
Top SIP return schemes
SBI Consumption Opportunity Fund: 20 year SIP returns 19.30% per annum
Quant Smallcap Fund: 18.75 percent per annum
ICICI Pru Technology Fund: 20 year SIP return of 18.63% per annum
Nippon India Growth Fund: 20 year SIP return 18.34% per annum
Sundaram Midcap Fund: 20 year SIP return 18.28% per annum
(Source: Value Research)
