Mutual fund calculator: Monthly SIP you need to accumulate ₹14 crore by age 50

Mutual fund calculator: Due to challenging professional life and rising work load at work place, a good number of salaried persons want to retire little earlier. For such professionals, one need to start investing from the early phase of one's career.

According to tax and investment experts, investments from early life enables an investor to achieve such goal with minimum risk. They said that one can plan to retire early by investing in mutual funds. They advised young professionals to invest in monthly mutual fund SIP (Systematic Investment Plan) as it gives around 15 per cent annual return in long term.

Speaking on importance of early investments in mutual funds, Pankaj Mathpal, MD & CEO at Optima Money Managers said, "If an investor starts investing from early age or say by 25 years, one has around 35 years to invest. In such case, if a professional plans to retire early or say by age 50, he or she will have still 25 years for investing, which is not a small time."

15 X 15 X 15 rule of mutual funds

To remind how investment from early age can help an investor achieve one's investment goal with ease, Pankaj Mathpal said, "One needs to remember 15 X 15 X 15 rule of mutual funds. This rule says that if an investor invests ₹15,000 for 15 years, then one can expect 15 per cent return on one's money and the maturity amount would be around ₹1 crore. However, my suggestion to the investor is to increase one's monthly SIP amount with increase in one's annual income using annual SIP step-up. This will increase the probability of achieving one's investment goal with minimum possible monthly SIP amount."

On how much annual SIP would be advisable for an investor, Kartik Jhaveri, Manager — Wealth Management at Transcend Capital said, "Normally, we advise 10 per cent annual SIP step up. But, if someone is mulling to retire by age 50, then my suggestion for such professional is to use 15 per cent annual SIP step up."

Mutual fund SIP calculator

If an investor starts a monthly SIP with ₹15,000 at the age of 25, then as per the 15 X 15 X 15 rule of mutual funds, one can expect 15 per cent annual return on one's money in next 25 years. As per the SIP calculator, if an investor uses 15 per cent annual step up in one's monthly SIP, it would be able to grow around ₹14 crore in 25 years or by the time he grows 50 years old.