Rs 3 Cr Today, Rs 52.24 Lakh Tomorrow: To get Rs 3 crore corpus in 30 years, how much do you need to invest today?

Retirement Planning: A retirement corpus can make your retirement phase smoother. Having money for your monthly expenses at retirement can be a necessity as well as a luxury. But if you think you can achieve that situation with an Rs 3 crore corpus? Think again! If you are 30 years old today, will your Rs 3 crore corpus in 30 years be sufficient? Your money loses value with inflation. So what looks like Rs 3 crore today will be equal to around Rs 52.50 lakh at a 6 per cent inflation rate in 30 years. In such a case, how much corpus do you actually need that will be equal to today's Rs 3 crore in 30 years, and what should be your lump sum, yearly, and monthly SIP investment to achieve that? See examples!

How inflation impacts your earning

Suppose you buy a thing for Rs 1,000 today.

At a 6 per cent inflation rate, the same thing will cost Rs 1,060.

The thing applies to your income also.

If you earn Rs 50,000 today in a scenario where inflation is 6 per cent, you need to earn Rs 53,000 to meet inflation. 

What will be future value of corpus?

Let's say you think an Rs 3 crore retirement corpus will be sufficient for you. Let's see the table to know how an Rs 3,00,000,00 value will decrease year by year for 30 years at a 6 per cent inflation.

In the table you can see that, in 10 years, the estimated value of Rs 3 crore will decrease to Rs 1,67,51,843.31; in 20 years, it will be Rs 93,54,141.81; while in 30 years, it will be Rs 52,23,303.93.

How much amount do you actually need?

If the estimated inflation rate is 6 per cent, this is how much extra corpus you need year-by-year for 30 years. 

Now, you can see that in 10 years, the inflation-adjusted value of a Rs 3 crore corpus will be Rs 5,3,725,430.90.

In 20 years, the value will be Rs 9,62,14,064.17, while in 30 years, it will be Rs 17,23,04,735.19.

It means that instead of an Rs 3 crore corpus, you will need an estimated corpus that is nearly 6 times larger than that.

Investment amount to achieve that target

Let's say you pick the lump sum, yearly SIP investment, and monthly SIP investment modes to achieve a corpus of Rs 17,23,04,735.19 at a 12 per cent annualised return; here are the estimated amounts you need: 

Lump sum investment 

The estimated lump sum investment will be Rs 1,78,62,274.51.

Yearly SIP investment

The estimated yearly SIP investment for the same will be Rs 6,37,474.84.

Monthly SIP investment 

The estimated monthly SIP investment to achieve the same retirement target will be Rs 55,925.42.

What does Rs 17,23,04,735.19 corpus mean?

Let's understand it in the current perspective. If you invest Rs 3 crore in a mutual fund from which your annualised return is 7 per cent, you may draw an estimated monthly income of Rs 1,98,000 for 30 years.

(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)