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Have you started retirement planning to secure your old age? If your answer is ‘no’, then get it done today. The biggest rule of personal finance is that by investing regularly over a long period, the magic of compounding interest works such that a big fund can be easily created. Many people start investing too late, due to which their money does not get enough time to grow.
But don’t panic, today we are going to tell you such an excellent and practical formula, under which you can easily create a retirement fund of ₹ 2 crore with a combination of mutual fund SIP of ₹ 5,000 and PPF investment of ₹ 12,500 every month. Let us know this entire calculation after tax deduction in simple words.
PPF: The most secure and attractive scheme from tax point of view
Public Provident Fund i.e. PPF is an excellent government scheme for long-term safe investment. A maximum of ₹ 1.5 lakh (i.e. ₹ 12,500 per month) can be invested in this scheme in a financial year.
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Major benefits of EEE category: this scheme Exempt-Exempt-Exempt (EEE) Comes in the category of. This means that the government does not have to pay even a single rupee tax on the money deposited in it, on the interest received and on the entire maturity amount.
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15 Year Calculation: Famous tax expert Balwant Jain According to this, the PPF scheme matures in 15 years. If you invest ₹12,500 every month:
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total investment: ₹22,50,000
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Estimated Interest: ₹18,18,209
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Total amount on maturity (completely tax free): ₹40,68,209
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Mutual Fund Equity SIP: Rs 5,000 per month
Along with PPF, you have to start SIP of ₹ 5,000 every month in a good equity scheme of mutual fund and continue this continuously for 15 years.
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15 Year SIP Returns: Your total investment in 15 years will be ₹9,00,000. If we average annually 12 percent return ($12\%\ Return$) If we assume this, then after 15 years this money of yours will increase to ₹23,79,657 Will be done.
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Total funds after 15 years: Now if ₹40,68,209 of PPF and ₹23,79,657 of SIP are added together, you will have a total of ₹64,47,866 A large corpus is prepared.
This is how a grand fund of ₹2 crore will be prepared in 25 years
Now the most interesting part of this strategy begins. You have to stop investing completely after 15 years. After this, you have to leave the total amount of ₹ 64,47,866 received from both the schemes in lump sum in the equity scheme of the mutual fund for 10 more years.
10 Years of Compounding Magic: This lump sum amount of ₹64,47,866 can grow over the next 10 years assuming an annual return of 12%. ₹2,00,26,093 (more than Rs 2 crore) It will be done. That means you have to invest only for 15 years, but this fund of ₹ 2 crores 25 years It will be fully matured and come into your hands.
Also understand the new problem of Long Term Capital Gains (LTCG) tax.
It is very important to keep practical tax rules in mind while investing. You will be entitled to tax on profits from mutual funds. Long Term Capital Gains Tax (LTCG) Will have to pay. As per current government rules, on profits of more than ₹1.25 lakh in a financial year 12.5% Tax is levied at the rate of Rs.
final conclusion: After deducting tax you will have initially ₹61,47,866 Will be saved. When you invest this net amount in lump sum in mutual funds, your net worth within 10 years and few months will be ₹2 crore fund Will be ready. This strategy is most perfect for those youth who want to live a self-respecting and happy life in their old age without being dependent on anyone.