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Home / Money / Q&a /  I earn 1.5 lakh/month. What should be my SIP to achieve 2.8 cr in 20 yrs?
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I am 38-year-old, I earn 1.5 lakh in-hand salary out of which 57,000 goes to housing loan, which will continue till November 2023. My fund requirements for two kids are from 10, 14, 18 and 25 years. To achieve target of 2.8 crore in 20 years, what should be my monthly SIPs.

Vikrant

The primary goals that I can understand from your query are children's future expenses and retirement. For your goal of 2.8 crore after 20 years, you need to do monthly SIPs of 39,000 or 31,000 if we assume an annual return of 10% and 12% respectively. These SIPs will only help you to reach your 20 year goal, however, you have also mentioned the need for funds after 10, 14, 18 and 25 years for your children's future. While I do not know the amount that you have in your mind for these milestones, here is a thought on how you can plan for all your goals.

From your present in-hand salary of 1.5 Lakh if you can try to invest 20,000 per month after taking care of your EMI and regular monthly expenses up to November 2023 ie. till your complete your EMI commitment you would be able to accumulate a corpus of approx. 5.26 Lakh assuming a return of 10% p.a. 

The idea should be to keep this accumulated amount invested and from December 2023 onwards increase your SIP amount to 57,000 as your EMI commitment will no longer exist. If possible you can target monthly SIPs of 77,000 ( 20,000 + 57,000) after 2 years as you were already investing 20,000 till this stage. 

The below table will help you visualise how much corpus you could have at different milestones mentioned in your query for both scenarios assuming a growth rate of 10% pa.

The corpus at each stage will reduce depending on how much you withdraw for the milestones you keep reaching.
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The corpus at each stage will reduce depending on how much you withdraw for the milestones you keep reaching.

The above corpus at each stage will reduce depending on how much you withdraw for the milestones you keep reaching. Hence, I would suggest you assign a target amount for each milestone just like you have mentioned 2.80 crore after 20 years and then relook into the above table to see how will the above strategy work for you.

From an investment perspective, you can consider investing in Equity Mutual Funds as the time horizon for the investment is long term.

Harshad Chetanwala, founder MyWealthGrowth.com

Have personal finance queries? Send an email to mintmoney@livemint.com

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