Rs. Two Crore Investment, SWP and STP at a Glance

EPS, MAHESH TRIVEDI: The author has over 40 years of experience in business journalism and writing articles on financial planning. He is also currently serving as a mutual fund advisor.

90 out of 100 investors who start earning do not realize that by the time they reach the age of 50-60, one day they will have to leave their job, business, or profession. Which we call retirement. Retirement is a great time to get rid of the hustle and bustle of earning and devote their body, mind, and wealth to countless activities like family, social service, or religious (spiritual) activities…. But as mentioned above, 90 percent of investors miss out on preparing for retirement from the first day of earning. Recently, a senior and well-employed friend who has reached the age of 60 asked a question, if we invest Rs. 20000000 (two crores) at once and get Rs. 200000 (two lakhs) per month from it and the value of the fund also remains the same or increases. I said yes…. comfortably but for that you have to cultivate the triple confluence of money, attention and patience.

Rs. Two Crore Investment, SWP and STP at a Glance

First of all, let us understand that, first start investing in mutual funds with liquid and then daily Rs. 25250 for 792 days in equity funds through Systematic Transfer Plan (STP) route. Considering the expected return of 10% per annum, at the end of 3 years, the fund value of Rs. two crores invested will be ₹2,66,32,271.62. Now, as soon as 3 years are completed, start withdrawing Rs. two lakh every month in your bank account through Systematic Withdrawal Plan (SWP). According to the GROWTH TABLE AT A GLANCE table given below, despite paying ₹38,44,260.90 as tax at around 30% during 20 years, you will be able to get a total of Rs. 4,80,00,000.00 back after SWP every month at Rs. Two lakhs. However, your fund value can be seen at the end of 20 years at ₹3,54,34,202.80. Young investors can invest at least 10 percent from the first day of earning, mature (under 40) investors can invest aggressively and retired investors can get a minimum investment plan of Rs. 30 lakhs, if they want SWP of Rs. 20000 per month, if they plan to invest Rs. 90 lakhs, they can get rs. 60000 a kind of monthly pension through SWP.

SWP Calculator

Summary

Taxes on Capital Gains

The tax portion won’t be deducted from the Cl. Balance, as capital gains taxes are paid during income tax returns. We’ve only projected the estimation of these taxes in this ‘Taxes on Capital Gains’ section.

GROWTH TABLE AT A GLANCE

TAX *: The tax portion is not deducted from the Closing Balance, as capital gains taxes are payable in the future when filing income tax returns.

The calculations given here are approximate. Which may fluctuate according to the market conditions and there may be losses. Therefore, investors need to take adequate study, experience and expert advice before investing in the stock market, mutual funds and any investment instruments.

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing.)

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