Retirement planning: How a Rs 5 lakh one-time investment can generate Rs 1.75 lakh monthly income

A simple illustration shows how starting early with a Rs 5 lakh investment can build a retirement corpus and support steady monthly income using a systematic withdrawal plan.

Recently, headlines were dominated by the news that a well-known comedian and Bollywood actor landed in Tihar Jail in connection with a cheque-bounce case. Beyond the gossip, the episode triggered a familiar, uncomfortable conversation online: how can someone who appears “successful” still end up cornered by financial stress?

We have seen versions of this story before. A celebrity, often with high earnings, at some point suddenly faces cash-flow pressure, debt issues, legal trouble, or a lifestyle that their long-term finances cannot support.

For regular earners, the lesson is even more relevant. A good income is not the same as a secure financial future. Security is built through planning especially for the one phase of life where your salary stops, but expenses do not.

That brings us to the most important long-term goal for most people: retirement planning.

What retirement planning really means

Retirement planning is the process of putting your finances in order today so that you can maintain a secure and comfortable life after you stop working. It is not only about “saving money.” It is about building an asset base that can fund your lifestyle for years while inflation quietly raises the cost of everything.

And yet, many people in their early 30s brush it aside with the classic line: “Abhi toh bahut time pada hai” (There’s still a lot of time left).

That feeling is understandable and also expensive.

Why starting early matters more than people realise

When you start late, you are forced to compensate in two ways:

Inflation makes your retirement goal bigger every year.

Less time means less compounding, so you need to invest more out of pocket to reach the same target.

Starting early does not require extraordinary discipline. It simply gives your money more time to do the heavy lifting.

To see how powerful this can be, consider a simple illustration.

The “one-time investment” for your retirement life

Assume you are in your early 30s and you have 30 years until retirement starting at age 30 and retiring at 60. Let’s also assume a life expectancy of about 70, meaning you want your retirement corpus to support you for at least 10 years post-retirement (for simplicity in this example).

Now consider this: a one-time lump sum investment in mutual funds today that can potentially fund a monthly income of about Rs 1.75 lakh during retirement years.

It sounds unrealistic at first until you follow the math.

The 30-year math: From Rs 5 lakh to Rs 1.5 crore

Step 1: Build the Retirement Corpus

Lump sum invested today: Rs 5,00,000

Time horizon: 30 years

Assumed return: 12 per cent CAGR

At 12 per cent compounded annually, Rs 5 lakh over 30 years grows to roughly:

Invested Amount (A): Rs 5,00,000

Estimated Value After 30 Years: ~Rs 1,49,79,961 (≈ Rs 1.50 crore)

So, a Rs 5 lakh one-time investment becomes a retirement corpus of about Rs 1.50 crore by age 60 (assuming the return holds over the period).

Transitioning to income: The systematic withdrawal plan (SWP) strategy

Step 2: Shift to a More Conservative Option and Set Up SWP for Monthly Income of Rs 1.75 Lakh

Once you have the corpus, the next step is not to chase high returns. The goal changes from “growth” to “income with stability.”

One common approach is to move the corpus into conservative hybrid mutual funds. These typically invest a majority in debt (around 75–90 per cent) and the balance in equity (10–25 per cent). Because they are debt-heavy, they are generally considered lower-risk compared to pure equity funds and are often used by conservative investors and retirees.

From here, you can use a Systematic Withdrawal Plan (SWP).

SWP is a facility that allows you to withdraw a fixed (or variable) amount at regular intervals: monthly, quarterly, etc. while the remaining money stays invested

Step 3: The Retirement Income Math (10-Year Illustration)

Assume the conservative hybrid fund delivers:

8 per cent annualised return over the next 10 years (retirement period in this illustration)

Now consider a withdrawal plan of:

Rs 1.75 lakh per month for 10 years

Total months = 120

Total withdrawal: Rs 1.75 lakh × 120 = Rs 2.10 crore

With an 8 per cent return assumption during this period, the Rs 1.50 crore corpus continues to earn, and over the 10-year period it is estimated to generate about:

Estimated earnings during retirement period: ~Rs 70.66 lakh (as per the illustration)

So, conceptually, you have:

Corpus at retirement: ~Rs 1.50 crore

Estimated growth over 10 years: ~Rs 70.66 lakh

Approximate total value generated over the period: ~Rs 2.21 crore

Total planned withdrawals: Rs 2.10 crore

This is why the SWP of Rs 1.75 lakh per month looks feasible in the illustration.

This is not about finding a “magic trick.” It is about understanding one simple truth:

Time is the biggest contributor to retirement wealth.

Starting early gives you compounding. Starting late forces you to invest much more to reach the same destination, especially when inflation is constantly raising the finish line.

The numbers above are an example to show the impact of starting early. In practice, you would adjust based on:

your retirement age

your expected expenses (and inflation)

your risk comfort

your return assumptions

how many years you want your retirement income to last

The principle remains the same: the earlier you start, the lighter the burden later.