FUND RADAR
Have `0 savings? Worry not,
you can still retire in 15 years
We have also provided a retirement timeline A guide to
retire early
By Ameya Satyawadi during retirement.) Age: 25
T
This plan is not just for the
he good news is that this richie-rich either. If you look at the
headline is not misleading. infographic on the right, you'll see that a
The bad news? It’s not easy to 25-year-old investing 50 per cent of their
achieve. (But let’s be honest: when is salary each month can retire in 15 years,
Monthly income
anything worthwhile ever easy?) provided they step up the invesment `50,000
So, without further ado, let’s dive amount by 5 per cent every year.
into the numbers.
You can retire in 15 years and Retire early dreams
comfortably live off your wealth While the dream of early retirement `
if you can: is achievable, it requires discipline
a) Invest exactly half your salary in and frugality. If you save less than
If you start `25,000 SIP
equity mutual funds starting today. 50 per cent of your income, it will
(50 per cent of your income)
b) Increase your investment by take you a few more years to retire (see in equity funds each month
5 per cent annually. the table below).
c) Reduce your monthly expenses by Ultimately, it comes down to how
10 per cent in retirement. much of your salary you’re investing
(We’re assuming that your equity each month. For example, investing
mutual funds will grow at 12 per cent 20 per cent of your monthly salary
annually, your yearly expenses would take someone 29 to 35 years to
will rise by 6 per cent due to inflation, retire with peace of mind. Increase SIP each year by
5 per cent
and you’ll shift to a 50:50 equity-debt In short, it’s a classic case of ‘no
plan yielding 9.5 per cent return pain, no gain’.
When can you retire? `
The number of years it will take for you to retire
If your post Reduce inflation-adjusted
If your post-retirement If your post-retirement
Investment expense reduces by retirement expense increases by expenses during retirement
rate expense remains by 10 per cent
(% of salary) 20%* 10%* the same* 10%* 20%* 30%*
20% 29 30 32 33 34 35
30% 22 24 25 26 27 28
40% 17 19 20 21 22 23 `
50% 13 15 16 17 17 18
60% 10 11 12 13 13 14 Outcome You can retire by age 40
70% 7 8 9 9 10 11 And if you save `30,000 per month
(60 per cent of your salary) and follow
*Adjusted for inflation the same steps, you can retire by 36!
12 Mutual Fund Insight October 2024
6XEVFULSWLRQFRS\RI>YLQD\WDPDYDGD#JPDLOFRP@5HGLVWULEXWLRQSURKLELWHG
