Best time to plan for retirement is......

Best time to plan for retirement is:

At the time of Birth.

(Because the 8^th Wonder i.e. Power of Compounding only works/works best when this power is given plenty of time/maximum time).

So, it is only in the hands of parents to give the best retirement to their child.

But how? Very simple. Parents just need to open a separate Trading cum Demat A/c for their newly born child and invest whatever amount received on the birth ceremony into Index ETFs and invest whatever amount received on child’s every birthday again into Index ETFs.

Ex. Suppose Rs. 51K invested at the time of birth and Rs. 11K invested at the time of every birthday till 30 years.

Assumed CAGR is 15-18% p.a. (given in past and very reasonable expectation)

Further, assumed that the newly born child will take her/his retirement at age 60 (Present Life expectancy in India is 70.15 years, will increase further in future).

Now, see the power of compounding when added with power of TIME:

@ CAGR of 18% (One-time investment of Rs. 51K + Annual investment of Rs. 11K for 30 Years)

After Years	Amount Invested till date	Value of Investments	Real Value of Investments (considering Inflation rate of 6% p.a.)
10	1.61 Lacs	5.26 Lacs
20	2.71 Lacs	30.00 Lacs
30	3.81 Lacs	1.60 Crores
40	3.81 Lacs	8.38 Crores
50	3.81 Lacs	43.86 Crores
60	3.81 Lacs	229.57 Crores	6.96 Crores

 

@ CAGR of 15% (One-time investment of Rs. 51K + Annual investment of Rs. 11K for 30 years)

After Years	Amount Invested till date	Value of Investments	Real Value of Investments (considering Inflation rate of 6% p.a.)
10	1.61 Lacs	4.30 Lacs
20	2.71 Lacs	19.62 Lacs
30	3.81 Lacs	81.59 Lacs
40	3.81 Lacs	3.30 Crores
50	3.81 Lacs	13.35 Crores
60	3.81 Lacs	54.02 Crores	1.64 Crores

 

“So, Dear Parents, if you want to give me the best of the best gift when I get born and join you all on this planet earth, please gift me the “gift of my retirement”. - Your newborn child (yet to be named) 😊”

Enjoy retirement planning !

Enjoy NOW !