3 Steps to get ₹2.5 Lakh Monthly Passive Income | SIP + SWP [VIDEO]

Are you dreaming of a retirement where your income isn’t tied to a job or a business, but flows steadily from your investments? Achieving a good amount of passive income for your golden years is not just a dream, it’s an achievable goal with the right strategy. This post delves into a powerful, 3 Steps to get ₹2.5 Lakh Monthly Passive Income, focusing on smart investment strategies through Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWP). We will see how SIP and SWP together can help you get monthly passive income of Rs. 2.5 Lakh to cover your monthly expenses during your retirement phase.

Watch below video to understand how you can achieve monthly passive income using the combination of SIP and SWP plans.

3 Steps to get ₹2.5 Lakh Monthly Passive Income Video

Watch more Videos on YouTube Channel

Let us now understand all 3steps to get Rs. 2.5 Lakh monthly passive income during your retirement phase.

Step 1: Accumulate Your First ₹10 Lakhs Through Strategic SIP

The foundation of your passive income journey begins with accumulating a significant sum in a well-performing mutual fund. The initial target is to build a corpus of ₹10 lakhs. This can be achieved effectively through a Systematic Investment Plan (SIP).

Consistent Investment is the Key: By committing to a monthly SIP of ₹10,000, you can realistically aim to reach approximately ₹8.24 lakhs in just 5 years, or a more substantial ₹23 lakhs over a 10-year period, assuming a conservative 12% annual rate of return.
Accelerate with Step-up SIP: To reach your ₹10 lakh goal faster, consider implementing a “Step-up SIP.” This involves increasing your monthly investment amount annually. This strategy aligns perfectly with salary increments or bonuses, allowing you to boost your contributions as your earning capacity grows, significantly shortening the time it takes to hit your initial target.

ALSO READ: Rs. 2000 SIP Returns Calculation for next 15 Years

Step 2: Nurture Your ₹10 Lakhs Investment for Decades

Once you’ve successfully accumulated ₹10 lakhs, the next important step is to let this amount grow untouched. This phase uses the magic the power of compounding over a long investment horizon.

Long-Term Horizon: After reaching the ₹10 lakh milestone, you can pause your SIP contributions. The lump sum should then remain invested in the mutual fund for an extended period, ideally between 25 to 30 years.
The Magic of Compounding: Witness the incredible growth of your capital during this period. With a consistent 12% expected return, your initial ₹10 lakhs can swell to an impressive ₹3.5 crores over 30 years.
Start Early for Maximum Impact: The earlier you begin this process, the greater the benefit. Starting in your 20s allows your investments ample time to compound, ensuring a robust corpus by the time you reach retirement age, say 60. Imagine the potential: an initial investment of ₹20 lakhs, maintained for 30 years, could potentially grow to a staggering ₹7 crores!

Below is the screenshot of the excel calculator of SIP with required amount accumulated from 1 to 30 years

Step 3: Implement a Smart Systematic Withdrawal Plan (SWP) for Retirement

With a substantial corpus built, the final step involves strategically withdrawing your passive income using a Systematic Withdrawal Plan (SWP).

Activating Your Passive Income Stream: As you approach retirement (e.g., age 60), you can initiate an SWP from your accumulated corpus (e.g., ₹3.5 crores). This allows you to draw a regular monthly income while ensuring your principal continues to grow.
Inflation-Adjusted Withdrawals: It’s vital to consider inflation when planning your withdrawals. Even with a monthly withdrawal of ₹2.5 lakhs from a ₹3.5 crore corpus, and factoring in a 4% inflation rate alongside an 8% effective return on your investments, a significant portion of your capital (e.g., ₹3.23 crores) can remain intact even after 15 years of consistent withdrawals.
Sustainable Income Strategy: The key to a sustainable SWP is to ensure that your monthly withdrawal amount is less than the monthly returns generated by your investment. This approach safeguards your principal, allowing it to continue generating returns and providing a perpetual income stream.

Below is the screenshot of SWP Calculation:

This comprehensive plan, combining the power of SIP for accumulation and SWP for strategic withdrawals, offers a clear path to achieving significant passive income for a comfortable retirement. The Excel calculator demonstrated in the above video is invaluable tool for planning.

Some more Reading

Save Home Loan Interest Amount!

Use Home Loan Excel Calculator that will help you to Save Interest Amount on Home Loan EMI.
Click below button to download Home Loan EMI and Prepayment Calculator in Excel:

Watch how Home Loan Calculator in Excel Works

Income Tax Calculator App – FinCalC

For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.

What you can do with this mobile App?

Calculate Income Tax for new FY 2024-25 and previous FY 2023-24
Enter estimated Investments to check income tax with Old and New Tax Regime
Save income tax details and track regularly
Know how much to invest more to save income tax
More calculators including PPF, SIP returns, Savings account interest and lot more

Download Income Tax Calculator APP from play store

Use Popular Calculators:

I’d love to hear from you if you have any queries about Personal Finance and Money Management.

JOIN Telegram Group and stay updated with latest Personal Finance News and Topics.

Download our Free Android App – FinCalC to Calculate Income Tax and Interest on various small Saving Schemes in India including PPF, NSC, SIP and lot more.

Follow the Blog and Subscribe to YouTube Channel to stay updated about Personal Finance and Money Management topics.