SIP investment plan is the talk of the investment world due to its various worthy benefits of power of compounding, transparency, easy customization, ease of access and much more. Investors prefer options in investing that provides them with the ability to tune elements based on risk appetite, financial status, money at disposal, etc. And a SIP helps with all of these so that one can reach their desired financial goals with time, patience and long term investment view. To invest in SIP, one can take the online or offline route of investing, based on convenience. In case of the former, the investor can visit the office of AMC or their website and invest in a mutual fund of their choice. And, in case of the latter, they can visit the office of the AMC and start the investment process by filling a form. Either way, it is imperative to convert your savings lying around to investments that contributes to your financial wellbeing, while helping you build a sustainable future corpus.
Every investor has a different financial goal, and a SIP investment plan can help you achieve any of them. Let us see these with respect to some common goals:
SIP & Retirement Planning – Retirement planning is ideally a lifelong process which includes strategizing, allocating, saving and investing, to finally reap the benefits when you are no longer working. A lot of elements are at play here such as time horizon, estimated spending post retirement, post- tax returns, etc, in order to know what is the amount they are aiming to save. Now, to calculate SIP returns here, one can use the SIP calculator. An amount saved each month in mutual fund schemes of your choice, over a long period, can build a strong corpus that can support you during your retirement days.
SIP & Tax Savings – One can lose a significant part of their income in paying taxes, which in turn means that they would be losing out on savings. To avoid this, one can use SIP that acts as a tax saving instrument, along with high investment returns. Investments of up to 1.50 Lakh done in ELSS mutual funds every financial year are eligible for tax deduction under section 80C of the Income Tax Act 1961.
SIP & Child Education – With higher education costs on an all-time rise, parents need to plan way in advance on how to give wings to their child’s dream. This is possible if you choose to invest in SIP for the long term, ideally 10 years or more. Suppose Mr. Kiran wants to save up Rs. 50 Lakhs after 25 years for funding his child education plan. Assuming 5% inflation and a 12% rate of return, he needs to make a monthly SIP of Rs. 9,012 for 25 years, to reach the desired goal. This calculation was made using a SIP return calculator, an online tool that can help one understand how much to start investing from today, for reaching their financial goals. To calculate SIP returns, these financial tools are a boon, and can help all investors navigate the SIP process easily.
In this read, our aim was to analyse SIP investment plan, of mutual funds with respect to reaching various financial goals and gain a better understanding about it using the SIP calculator.
