In a recent NidhiTalks video, Nidhi Sinha, Editor, Outlook Money, shared how much you need to save to build a corpus of Rs 5 crore—highlighting the difference between starting early and starting in your 40s. Here are two scenarios to help you understand how much you would need to save for this goal to be attainable.
In the first scenario, you start saving early and in the second, start saving a little later, like in your 40s. The compounded annual growth rate (CAGR) is 12 per cent in both cases. If you start saving at age 40, you will have an investment horizon of 20 years to reach your goal and you will have to invest Rs 50,000 per month to achieve your corpus. Now, picture this: someone who starts saving at age of 25 years, will have 35 years to reach the goal and will need to save only Rs 7,700 per month, assuming the same CAGR.
For the first case, where you start at 40, you would have invested Rs 1.20 crore, while if you had started at age 25, you would have only invested Rs 32.34 lakh. In the second case, it is less straining and stressful, and also the savings amount is easier to set aside.
