Retirement Planning: What Does It Take To Make Rs 10 Crore Through Investments?

Creating a retirement corpus of Rs 10 crore may seem like a dream, but it can become a reality with discipline, patience and a proper investment plan. One of the most effective ways to build a Rs 10-crore corpus could be to start early.

Consistent investments over a long-term horizon will also help your money to grow faster due to the power of compounding. Let’s take a look at key aspects you should take into account while planning to build a retirement corpus of Rs 10 crore.

If you start early, the longer investment tenure can allow you to build a sizable corpus even with small amounts due to the power of compounding. For instance, at an assumed average annual return of 12% from equity mutual fund SIPs, if you start at 25, you would have to invest approximately Rs 19,000 a month for 35 years to accumulate Rs 10 crore. But if you start at 35, the monthly investment amount will increase to around Rs 59,000 to teach the same target.  

Equities are essential for long-term wealth generation because of their ability to beat inflation. A high equity weighting in the initial years, getting proportionately lower and eventually rooting in debt and fixed income tools when you approach retirement, balances growth and stability. Other instruments, like the Index funds and diversified equity schemes, could offer an alternative investment option. Similarly, seasoned investors can also explore direct equity options.

Your earnings will probably increase in the long run, so your SIP investment amount should increase as well. Even a 5% to 10% rise in your SIP every year can cut down the total number of years to accomplish your goal. This step-up mechanism helps to hedge your investments against inflation and increasing lifestyle expenses.

Though Rs 10 crore can be a big amount now, inflation will reduce its purchasing power over the years. You might need to set an upper target so that you can preserve your desired lifestyle.

Repeated withdrawals of money from your retirement corpus while you are accumulating it can ruin compounding. Keep your retirement fund isolated from other investments and avoid withdrawing money from it for temporary needs.

Reaching the target of a Rs 10-crore retirement corpus isn’t about chasing high-risk investments but about starting early, investing consistently and letting the power of compounding work in your favour. With a well-planned strategy and regular review, the dream of a financially secure retirement can become a reality.