How easily Win your retirement by investing Nothing.....? just matter of time

Due to over response on retirement question i am going to share practical and real probable scenario with you all, when you can easily win your retirement corpus without any huge burden. 


If you are 25 years or below  reader kindly read twice and understand importance of retirement plan. if you are below 30 years don't worry but don't waste time wake up soon and plan speedy.

I am sharing my experience of how one can easily attain retirement corpus without making any huge or bigger investment.

Few clarification from my side,

Here, I am discussing Average salary of person either you may be having big salary or less. 
Second, I have taken middle class family expense to decide entire expense at time of retirement.

Invest in mutual fund which is specifically focusing on retirement wealth creation plan only. example. Reliance Retirement Wealth creation scheme, Where you may be having lock in period of few years, you can switch fund from equity to debt and debt to equity for certain times in one year.



Now, see the magic of compounding in retirement plan.....

Invest 10% of your earning every year, like I am having 4 lakh p.a. package i have to invest 40000 yearly to safeguard my retirement easily. Any person earning per month is max expense in his living style at maximum level. If Mr. A earning 20000 per month I am assuming his living structure is like spending maximum 20000 per month to decide future value at time of retirement.

I am considering inflation @ 5% per Year so, 100 rs worth in march, 2019 will same like 500 Rs. in 2054. Taking compounding effect of 5% coming 5 times more cost.

So, I can say that person spending 20000 Rs. today need minimum 1 lakh to survive after 35 years per month. same way any person spending 1 lakh per month need 5 lakh per month after 35 years.

I have calculated above plan by taking per year earning 2,40,000 and 3,60,000 p.a. he is investing 20000 and 30000 per year to reach retirement plan safely. 


I have taken 12% compounding growth on investment which is very logical and achievable.  As many people take 15%, 18% or more to show bigger number. But, being a professional let take very nominal rate of return.

Mr. X as on March 2019 completed 25 years and started investing from today to achieve his goal at 60 years age. so, investment made on March 2019 will harvest in year March 2054 when he reach at age of 60 years, same way investment made in March 2020 will redeem in March 2055. so, till age of 95 years investment period will be constant of 35 years.

If any person start at age of 30 then period of investment will be 30 years period.

In short, retirement age - First investment date. Difference will be period of investment lock in.

From the Table we can derive value of person investing 20000 per year will get 9.5 lakh after 35 years @ 12% p.a. so, approx 80000 per month. To reach 5 times expense of current spending one has to invest 10% of total earning.

Here, anyone earning 3,00,000 p.a and invest 30,000 per year at age of 25 years he will get 14.14 lakh after 35 years. so, 1,17,000 per month he will able to spend per month while current earning is 25,000 per month so, almost 5 times more he will get to spend at age of 60.

The same way If you have started this retirement plan at 30 years you will get amount written at year of 30.

Conclusion we derived here start early saving make you more safe and wealthy life. 

Thanks
Derivativelearn