Already 30, But Aim To Retire At 50 With Rs 2 Crore? Here's How You Can Do It

Retiring at the age of 50 years with a corpus of Rs 2 crore may seem like a formidable goal, but it can be achieved if you plan early and remain committed to a disciplined investment plan. If you are starting your investment journey at the age of 30, you can still plan your finances over a 20-year horizon to retire at 50.

A well-planned investment strategy and financial discipline can help you achieve this goal easily, without making any compromises on your current lifestyle.

To accumulate Rs 2 crore in 20 years, you must invest regularly. At a conservative average return of 12% per annum, you would have to invest around Rs 22,000 every month in equity mutual funds through an SIP (Systematic Investment Plan).

If your return expectation is a little lower at 10%, your monthly investment jumps to about Rs 28,000. The sooner you begin, the more your returns get amplified due to the power of compounding.

Equity mutual funds are the most effective means of increasing wealth in the long run. Invest in a combination of large-cap, flexi-cap and mid-cap funds. Check your portfolio annually and rebalance if needed. If you are conservative, you can begin with a 70:30 combination of equity and debt schemes (such as PPF or debt mutual funds). In the last five years toward retirement, you can move increasingly toward debt instruments.

Don’t maintain a consistent SIP. Raise your investment by at least 10% annually as your income increases. This step-up SIP technique can reduce the burden in subsequent years significantly and allow you to beat inflation.

Put your future first and not your lifestyle. Cut discretionary expenses, such as frequent holidays, impulsive buys, or high-end gadgets. The amount you save can be invested in the existing schemes or new retirement funds.

Early retirement implies that your finances must last longer. Create an emergency fund of at least six to 12 months of expenses to keep your investments intact. You need to have adequate health insurance coverage as old-age-related ailments could increase the financial burden.

In conclusion, if you are exploring the idea of early retirement, you have to plan smartly. Begin now, remain consistent and let your funds do the hard work. By using a diversified investment plan and staying on course, building a Rs 2-crore corpus by the time you hit half-century won’t be a difficult task.