How a One-Time Investment of ₹5 Lakh Can Create ₹1.5 Crore Retirement Corpus

Planning for retirement is essential to ensure financial stability in your later years. Investing in either a lump sum or monthly SIPs over the long term can yield substantial returns, thanks to the power of compounding. Let’s explore how a one-time investment of ₹5 lakh can grow into a ₹1.5 crore corpus over 30 years.

Why is a Retirement Corpus Important?

After retiring, you’ll need a steady fund to cover living expenses without running out of money during your lifetime. Building a retirement corpus ensures you can meet these needs comfortably.

Investment Options for Retirement Planning

You can choose from:

• Market-linked options: Mutual funds, equities.
• Non-market-linked options: Fixed deposits, bonds.

One-Time vs. Monthly Investments

• One-time investment: Deposit a lump sum and let it grow over time.
• Monthly investment: Contribute a fixed amount every month, such as through SIPs.

How Do Investments Grow Over Time?

Here’s an example:

• SIP: Investing ₹10,000 monthly for 25 years at a 12% annual return grows into ₹1.89 crore.
• Lump Sum: A ₹2.5 lakh one-time investment for 25 years at the same return grows into ₹42.5 lakh.

Stretching Investment Duration

Increasing the investment duration to 30 years amplifies growth due to compounding:

• SIP grows to ₹3.53 crore.
• Lump sum grows to ₹74.9 lakh.

How ₹5 Lakh Can Grow into ₹1.5 Crore

Investing ₹5 lakh in mutual funds at a 12% annual return:

• 10 years: Corpus grows to ₹15.5 lakh.
• 20 years: Corpus grows to ₹48.2 lakh.
• 30 years: Corpus grows to ₹1.5 crore.

Starting Early Benefits

If you invest ₹5 lakh at age 25, you’ll reach a ₹1.5 crore corpus by 55. Extending the investment to 60 years of age increases the corpus to ₹2.64 crore.

Compounding accelerates growth as returns are reinvested, making time your greatest ally in wealth creation. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.