HDFC MF

Weekend Bytes
A weekly series from HDFC Mutual Fund

Why is Retirement Planning

important even in your 20s

hdfcfund.com
Weekend Bytes | July 2024

Mindset in the Early 20s –

Why should I plan for Retirement?

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Amidst all of this, planning and investing for my retirement at this

stage seems antithetical and premature, right?

Reality –
I should start my Financial Planning for Retirement…

Growing old is inevitable. Furthermore, lifespan keeps increasing with

medical science constantly making advances. All these factors are making it
increasingly common for retirees to find themselves supporting their aging
parents, even as their own income streams diminish.

To tackle this, investing a certain percentage periodically from your salary –

a Systematic Investment Plan (SIP) can provide the required impetus to
your final corpus. Starting early gives a head start to your investment’s
compounding potential by cutting through the short-term volatility in
markets, benefitting investors in the long run.

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Weekend Bytes | July 2024

Illustration:
Impact of delaying
investments through an SIP

Particulars Ram Shyam

Beginning Age of Investment 25 35

Age of Retirement 60 60

Period of Investment (in years) 35 25

75% of the SIP Amount invested per 10,000 10,000

month in Equity and 25% in Debt (in ₹)

Rate of Return* (%, annual) 11.50% 11.50%

Final Corpus (in ₹ crore) ₹4.89 crore ₹1.57 crore

Difference in value of investment at the time of ₹3.31 crore

retirement (in ₹ crore)

*Returns calculated by taking mean of 10-year rolling returns between 01/06/13 and 30/05/23 for
benchmark. i.e. 75% NIFTY 50 (@12.93%) and 25% 10-year G-Sec (@7.20%)

Past performance may or may not be sustained in future and is not a guarantee of any future returns

Inferences from the illustration

Delay of 10 years Reduction in the

value of investment by 3.31 crore

If Shyam wants to achieve Ram’s final corpus

in 25 years, he would have to invest over
thrice the amount every month – ₹31,370!

So, why hold yourself back from thinking long

term? Start planning at the onset for a smoother
life after retirement!

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READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

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